The coronavirus pandemic has upset nearly every aspect of the way the world does business. Most non-essential businesses in the Philadelphia area have started to operate remotely since the pandemic hit. Non-essential employees have been telecommuting from home. Many retail companies have shifted to delivery only.
Depending on the severity of local COVID-19 outbreaks, some non-essential businesses have even had to shut down completely under county or township law.
What do you do when you’re tied to a commercial lease for space you can no longer use? Many businesses have had to cut costs as revenue has fallen. A high rent payment on your balance sheet now could jeopardize your company’s survival.
Business owners facing these types of drastic changes are justified in wanting out of their commercial leases. Can you get out of your lease because of the pandemic?
The answer is: possibly. Most commercial leases require that you pay a penalty fee for early termination. But landlords haven’t been immune to the effects of the pandemic. If your commercial landlord faces a high number of vacancies with a low chance of finding new tenants anytime soon, they may be more willing to negotiate better lease terms for you.
Every commercial lease is unique. The only way to know your options is to go over the actual terms of your lease – preferably with the help of an experienced local business lawyer. Holmes Business Law Firm is dedicated to getting the best terms possible for our clients. Call the Philadelphia offices of Sarah Holmes today for a consultation at 215-482-0285.
Important Terms for Terminating Your Commercial LeaseWhen reviewing your commercial lease, look carefully at any language discussing how your lease could end. Clauses to look for include:
Your commercial landlord may be sophisticated and experienced, with many properties and lease agreements. They may be represented by professional property management companies. When approaching your landlord about terminating your commercial lease early, you must be prepared to back up your request with financial documentation and proof of hardship.
At the same time, you have to consider that your commercial landlord may not necessarily have deep pockets. They also have bills like payroll, utilities, and taxes. Their property may get foreclosed if they fail to make their mortgage payments on time.
As a result, a commercial lease early termination can be a delicate negotiation. Even if you've had a good relationship with your landlord in the past, you don't want to ruin it now.
To get the best results for your business, you should evaluate where you stand legally and financially with an experienced business lawyer. Consider:
Call our Philadelphia area law offices now at 215-482-0285 for a consultation with an experienced lawyer dedicated to helping your business thrive.
Sarah E. Holmes is a Philadelphia business attorney and strategist that helps start ups and established businesses looking to expand, protect their assets and increase their profits in an approachable, down-to-earth way. When you're looking for a business lawyer in Philadelphia, the Main Line or New Jersey, we can help.