If a commercial tenant wants to get out of a lease early, what are a landlord’s legal rights?

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If a commercial tenant wants to get out of a lease early, what are a landlord’s legal rights?

My tenant’s business is closing but they signed a 4 year lease and we are only a year into it. What steps as a landlord do I need to take at this time?

Asked on December 27, 2010 under Real Estate Law, Iowa

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Generally speaking, in any contractual situation, you as the landlord need to review your contract first. See what provisions are included about security deposits, the lease term and the possible remedies if the lease is breached by you or by the tenant.  Then you want to ensure you mitigate your damages by advertising and doing what you can to find a replacement tenant quickly.  The more you mitigate your damages, the less the old tenant has to pay in damages and the better your case looks when and if you sue the old tenant for benefit of the bargain (did you lose money on the new lease for example) and any other expenses (did you have additional repairs that cost more than the security for whatever reason)? This is really what you need to do to mitigate. Liken it to someone who gets into a car accident, is hurt, but refuses to seek medical treatment and gets worse.


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