Writing a Commercial Lease Termination Letter to Landlord

A commercial lease typically has a specified lease start date as well as a firm termination date, and both the landlord and the tenant are required to perform based on the terms of the lease. 

This means that the tenant is required to make rental payments as agreed based on the terms of the lease. 

There are instances, however, when the tenant needs to break the contract. Some leases have provisions for breaking a contract before the termination date, and others do not. 

However, in all instances, it is important for the tenant to provide a commercial lease termination letter to the landlord when ending a lease earlier than is stated in the lease terms.

The Introduction Of The Letter

The initial section of the commercial lease termination letter from a tenant to the landlord should state clearly what the letter is about. It should identify that you are planning to break the lease that you have signed and the reason for doing so.

You do not necessarily have to give a firm, concrete reason for the termination. You can state, for example, that there are reasons beyond your control or that your financial situation dictates the need to relocate.

The Terms That Are Being Broken

In a following paragraph, you should go on to state the specific terms that are being broken. 

For example, a specific date when you plan to vacate the property should be provided, and you should also state the termination date that was agreed to in the lease. In addition, the property address should be provided to the landlord.

Keep in mind that some landlords own multiple commercial properties, so do not assume that the landlord will immediately know which property you are talking about in your letter. The second paragraph of your letter should state all of the facts clearly.

The Cost And Reimbursement To The Landlord

When a lease is terminated early, the landlord typically will lose money. The lease does require the tenant to continue to pay rent even if the tenant moves out.

Therefore, the next paragraph should state the estimated financial loss to the landlord, if any, as well as the reimbursement or allowances that are being made to compensate the landlord for this loss.

For example, if you have found another tenant who wants to move in, this can be suggested to the landlord as an option. If you have paid a large security deposit, you can recommend that the additional rent payments be deducted from the security deposit.

Most leases are written such that the landlord does not have to agree to an early termination, and it is up to both parties to come to an agreement for terminating the lease early.

This section of the commercial lease termination letter is vital because it will provide the landlord with information that shows, in the best case scenario, that he or she will not lose money by agreeing to an early termination.

Future Contact Information For You

Before closing out the letter, you should provide future contact information for you personally or your business. This may be your home address where future letters regarding the termination can be sent to. It can include an email address, a phone number and a fax number.

In most cases, the landlord may have used the rental property as a mailing address to contact you in the past, so it is important to provide future contact information in this letter.

Closing The Letter

An early termination of a lease can create stress and even bad will between the two parties if they do not come to an agreement. 

Most people do not want to deal with a contentious legal matter, and the goal would be for both parties to comes to an agreement that is suitable for both.

If you have made a reasonable offer to reimburse the landlord for the loss of rent and other expenses associated with the early termination, you may feel confident that there is a high likelihood of your offer being accepted.

However, upon closing the letter, you should state your desire to hear a quick response of an agreement or a counter proposal to the offer.

You should also state that by signing the current letter, the landlord agrees to the terms that you have set forth regarding the early termination.

A commercial lease termination letter to landlord is a professional and legal way to announce the desire to end a lease early and to state the desired terms of the termination. 

If you have the desire to end your lease early, you may consider giving your landlord as much notice as possible.

However, you should also take time to structure an allowance or compensating factor for the landlord, if possible. As you prepare your termination letter, keep these points in mind.

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