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Breaking a lease in California with the least financial liability

Understanding California real estate laws regarding a commercial lease is important for business owners. In the event a commercial lease has to be broken, reducing the financial liabilities can be accomplished with a few significant steps. The first step is to read the lease terms and have a solid understanding of all obligations on either side regarding early termination. There should be terms directly related to early termination of the lease. Identifying those terms, such as security deposit and financial penalty, is important.

Subletting the space to another company is another option if allowed. Checking the lease to see if it is or not and then contacting the landlord and requesting to do so would be the next logical step. Subletting can reduce the financial liability associated with early lease termination. Negotiating with the landlord is the next step. Possibly both parties could come to an agreement on lease modifications, such as forgiving an early termination penalty or a shorter lease duration. In the event there were any adverse conditions or contract breaches on a landlord's part, under state law they could be a legal foundation for an early termination.

Delivering a written notice to the landlord regarding early termination, then cleaning and vacating the property is next. Discussing the lease terms that refer to the return of the security deposit is a significant factor. Meeting as many requirements as possible could result in return of all or part of the security deposit.

If an agreement can't be reached regarding unpaid rent and return of the security deposit, consulting with an attorney could be the final step. A business and commercial lawyer who regularly deals with commercial lease disputes could help by interpreting the lease agreement, negotiating with the landlord and possibly resolving the dispute with the least financial exposure for a client.

Source: Houston Chronicle , "How to Break a Lease With Minimum Financial Liability", Cindy Chung, October 07, 2014

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