A lease is a contract binding two or more parties to the terms of the agreement. Often, after signing a lease agreement, an occupant may want to leave the rental unit early for several reasons. The owner then voids the lease in such conditions. It is necessary to abide by the State’s laws and the lease requirements when providing a notice of intent to terminate a lease.
When you have a business and have rented commercial space from a landlord, you notify him/her using the commercial lease termination letter if you are not planning on renewing. Notifying the landlord in time enables him to secure another tenant early and ensures that your business regains its security deposit.
What is Lease Termination?
Lease termination occurs when a tenant does not plan on renewing his/her stay in a rented space. Because the lease is a contract, you as a tenant are bound by the lease duration. This means that you are liable for paying rent over the contract term. But there are exceptions, like when the landlord violates the lease. Some states offer specific grounds for you to terminate the contract, like calls for military duty or domestic abuse issues.
A lease termination letter is a notice used to end a lease agreement early or to confirm that an expiring lease term will not be renewed. You should send an early termination letter to make it easier for the landlord to find another tenant in time. The contract may suggest a particular time, but 30 days is considered sufficient. Examine your lease to ensure that you follow the correct protocol.
Types of Commercial Lease Termination Letter
A commercial lease termination letter is a notice used to terminate a lease early or indicate that the expiring contract’s duration won’t be renewed. A commercial lease termination letter has various types. For example, if you wish to cancel a monthly or weekly lease, you will use an eviction notice instead.
A commercial lease termination letter is the one that is used in case a commercial piece of property is to be focused on in the process of termination.
Below are the common types of commercial lease termination letters:
Commercial lease warning notice
A commercial lease warning notice is sent to a tenant if they have violated the lease agreement, and they need to be informed. For example, let’s say you have had parties at your house on weekends with loud music and many people in attendance, and in the lease agreement, there are rules on loud music and having visitors past agreed hours. The landlord will then send you this type of letter informing you of the violation.
You will then have to consult with the landlord to come up with a solution. For example, you may say you will install soundproofing materials or void the parties altogether.
Commercial eviction notice
A commercial eviction notice is sent to a tenant demanding payment of rent. It is also known as a notice to pay rent or quit. The landlord uses a proof of service form to ensure that the tenant receives the eviction notice. This type of commercial lease termination letter also includes the date the commercial lease started, the sum of unpaid rent owed, the duration the tenant has to pay the rent, and the consequences of continuing to default rent, i.e., vacating the area at a particular date.
Commercial lease termination notice
Landlords will use this type of notice to inform you that your lease will not be renewed. There are various reasons where this termination may occur. Maybe the landlord has found another tenant to sell the commercial property to. Your lease had a start date and an end date and is not renewable (also known as a fixed-term tenancy), or either you and the landlord agreed to terminate the lease permanently.
Elements of a Lease Termination Letter
Once you plan to end the lease and write a letter of lease termination, it is essential to know about the important elements. They are found in commercial lease termination letters intended for different land leases, including college property rental and commercial property leases.
Below are the elements of the commercial lease termination letter you need to take note of:
- Landlord: Just like any business paper, the identities of the people involved must be as clear as possible. One of the most important people to mention is your landlord.
- Tenant: As a resident, you are the other half of the two parties involved in the leasing arrangement. For similar purposes, state your full name in the letter. If you do not include either your name or your landlord’s name, your early commercial lease termination letter will be declared void after legal experts check it.
- Original rental agreement: The third significant element is the initial tenancy arrangement between you and the landlord. Among the most relevant details of the lease agreement to be included in your commercial lease termination letter are the agreement’s name, the start date of the agreement, and the future end date of the contract.
- Vacate date: Including the date, you intend to vacate the premises is a sign of professionalism and respect towards your landlord.
- Forwarding address: Including a forwarding address is vital for both you and the landlord as it provides information on where future security deposits or notices can be sent.
- Reasons for termination: State the reasons for termination in the commercial lease termination letter as it is essential because it can influence whether the landlord will accept your request for early termination or not. State your reasons as clearly as you can.
- Additional information for early termination: The additional information is your intent to end the lease early. If you are planning to terminate the lease early, state your plan in the first paragraph. Your reasons should come from a business point of view. For example, you could say that you have found another location that is suitable for your business. If there is a cash penalty for terminating the lease early in the contract, try negotiating with the owner to lower the cost.
How to Write a Commercial Lease Termination Letter
Like any other letter, a commercial lease termination letter has a format you should follow when writing. Your commercial lease termination letter should follow a specific format to make it understandable and easy to read. Writing your commercial lease termination letter in the correct format also comes across as being professional and not casual.
The format is as follows:
This is where you include the following details;
- Your name
- Business name
- Your position in the business
- Business contact number
- Recipients information
Subject line (which is optional)
The subject line is optional. However, including it makes it easier for the reader to know what the letter is about. You may even start your commercial lease termination letter with a subject line and write your details after your signature at the end of the letter.
In this paragraph, you should mention that the commercial lease termination letter acts as a notice that you will not renew your lease with the landlord or that you will terminate your lease earlier than the scheduled date. The explanations you are going to offer do not need to be explained. A short description of the cause for this is enough. You will also state when you intend to vacate your renting location and when you will return the keys.
You can also specify when the lease will be terminated in compliance with the agreement you have signed if possible in the commercial lease termination letter. If you have violated any of the terms and conditions set out in the written agreement, you can mention what you have broken.
In this paragraph, let your landlord know how they can contact you in case they have questions. Also, thank the landlord for allowing you to hire their space for your business.
Finish your commercial lease termination letter by including your signature at the end. The signature is your typed name.
Commercial Lease Termination Letter Template
______________ [Company name]
______________ [Company address]
______________ [City, state]
Date: __________ [Current date]
The recipients’ details
__________ [ Address]
__________ [City, State]
__________ [ Phone number]
__________ [ Email Address]
Dear _________________, [Name of the recipient]
The business lease was entered on_________________ [the date the lease was initiated]is expected to expire on_________________ [the date the lease is to end]. This letter I have written is to let you know that I will not renew the lease on the _________________ [the place the building is located]. We’re going to move to our new place during_________________ [the date they will relocate]. Over the last two years, my business has been successful. Your office room served us well, but we wanted to create a new office closer to our client base.
Since _________________ [the date the company will start in the new building], _________________ [the name of the company] official address will be _________________ [the address of the new location]. Please send your correspondence to our new address, _________________ [name of the one to send the correspondence to], _________________ [position of the one to send the correspondence to].
As per our lease contract, the initial month of the lease has been paid upfront. We made a number of changes to the property with your approval. As you have decided, these changes are taken into account and therefore will stay fixed long after we leave the office. We took excellent care of the property and will leave the premises to the next tenant clean and prepared. During_________________ [the date when the inspection will be done], we would like to have the last office inspection.
To arrange a time that is appropriate for you, you may contact _________________ [ name of the one to send the correspondence to]. If you have any queries, feel free to call _________________ [name of the one to send the correspondence to] or _______________ [the managing director].
____________ [Your name]
Commercial Lease Termination Letter Sample
Manager, Kingston enterprises
334 Kensington St.
23rd Jan 20xx
224 Brandt St.
The function of this letter is to serve as a notice of termination of my lease agreement. Currently, I am a tenant at the address listed above under the terms of the lease agreement that expires on 31-1-2021. This letter acts as a notice that I do not wish to extend or renew the lease agreement and leave the leased property no later than 5-2-2021.
Therefore, I am officially requesting a survey of the property referred to above with a property manager, owner, or another authorized person. After the survey has been completed and deductions have been made, you can forward the balance of my security deposit by mail to the following address: 3788-00100.
Download Free Templates
Templates help you to write commercial lease termination letters in the correct format. They also make work easier by saving a lot of time as you do not need to cram the structure. We have provided easy-to-follow and effective commercial lease termination templates on our website. Feel free to download them and customize them according to your liking.
A commercial lease termination letter is meant to end a business agreement between the two parties: the occupant and the landlord. Submit your commercial lease termination letter one month before the date of termination of the lease. Organizations that rent commercial space from a landlord must inform the owners if they do not want to renew the lease. An early notice allows the landlord to identify a new tenant for the property and guarantees that the organization recovers the security deposit.
The commercial lease termination letter should indicate the dates you plan to clear the location and the exact date you intend to return the landlord’s keys.
Tips for Terminating a Commercial Lease
Business is uncertain and is prone to several influences. There are many reasons why you, as a tenant, may want to terminate your commercial contract. However, you are likely to consent to a certain leasing period for commercial property under a legally binding arrangement. This means that it’s not as easy as just walking away and giving back the landlord’s keys.
Here are a few tips to get out of a commercial lease early:
Asking to surrender
One way to terminate your commercial lease is to contact your landlord and ask to surrender the property. A lease surrender is where both you and the landlord agree to break the lease. The landlord has no moral duty to consent to the submission if you try to negotiate with them. The terms of surrender are also available for discussion. You will also have to pay a surrender fee to the landlord to cover the violation of the lease agreement.
The advantage of a lease surrender is that you will no longer be under any legal obligation. However, if the landlord decides to surrender the lease, you will also have to cover their legal expenses.
Most leasing arrangements have an early termination condition. Even though early termination clauses are uncommon, they can be negotiated into commercial leases. As the owner of the business, you must negotiate these conditions before you sign the lease terms. Any changes can be included as part of the early termination clause. You should anticipate that you would have to pay the landlord’s expenses involved with the lease’s premature termination. This could include court fees for evaluating the contract’s expiration or the payment of rent until your landlord identifies a new commercial tenant.
Conditions under the law
Understand the conditions that allow early termination under the law. Although circumstances contribute to a general termination of the lease, there are several circumstances under which one or both parties can wish to terminate the arrangement early. Since every commercial lease arrangement is distinct and the right to cancel depends on the lease’s specific terms, it is advisable to seek legal advice to ensure that proper legal means are followed.
As a business owner, you have a network of friends, fellow business owners, and associates. Use these networks to decide if there is an eligible person to take over the leased property if you want to terminate early. Presenting a possible occupant to the property owner could inspire them to approve that the contract be terminated.
Terms of contract
Before you give a notice of termination to the owner of the land, carefully read the terms of the original contract to determine if the lease is fixed-term, there is a violation of any term of the lease by both parties, or it contains clauses on early termination.
Frequently Asked Questions
Is a lease valid if the dates are wrong?
The dates in a signed lease agreement can’t be wrong unless both parties believe they are wrong. If only one party believes the dates are wrong, then they are not wrong. They are disputed. In that case, only a court can determine whether the dates are wrong and what the correct dates should be. However, if the date is off by years, there might be an issue.
Can landlords ask for rent in cash?
The only conditions that cause the landlord to require payment in cash are when the tenant has paid a cheque that bounces or when the tenant has demanded a “stop payment” on a money order or a cashier’s cheque. In those situations, the landlord can seek cash deposits, but the landlord must send the tenant a written explanation together with a copy of the bounced cheque
Can I sue my landlord for emotional distress?
Suppose you are claiming damages for emotional harm caused by hostility on the landlord’s part of restitution for gross and deliberate discrimination. Suing could well be your best bet. Understand what’s involved in the suing of the landlord. You can bring a complaint to a federal or state court.