Most people view business leases as something they can never get out of. Thankfully, with a little ingenuity and a good attorney, there are ways to plot your escape from an otherwise binding property lease. In his latest Huffington Post article, “How to Get Out of a Bad Lease,” attorney Jack Garson provides these lease extraction strategies if you find yourself in a bad situation:
· Find a technicality. You’d be surprised how many landlords cue up a seemingly solid lease but then leave out a critical piece of information. This is one time that reading the fine print really can work in your favor.
· If something smells rotten, it probably is. If you are subjected to unacceptable working conditions – unreasonably loud construction nearby, water leaking into your place of business, erratic heating and cooling systems that result in your employees wearing their winter coats inside the office – simply take out your iPhone and record what’s going on. Evidence of unacceptable conditions, when coupled with solid case law, can be just the right combination for terminating your lease.
· Cut your losses. Feel like you’ve got nothing left to lose? Then leave. Garson sometimes advises clients to shut down their current business and form a new business elsewhere. It’s not a perfect solution, but it’s an option when all else fails.
Bankruptcy, of course, provides a well-known escape hatch. Generally, a tenant can terminate a lease in bankruptcy and limit its liability to one year's rent - sometimes less -but it’s an expensive and intrusive option. The tenant spends a small fortune and needs approval for most business decisions, paralyzing operations and putting the company in a death spiral.
With advanced planning and skillful legal advice, you can dramatically enhance your ability to build escape hatches into your leases and engineer a pain free exit, if it comes to that. There is always a way out of a lease, Garson suggests, but you have to know where to look for it.