Early Exit Strategies

Early Exit Strategies

Whether you have a commercial office lease, retail lease or industrial lease certain events can occur which ultimately result in a need to end your lease prior to the expiry date. An early lease termination carries a significant financial risk and has the potential to damage your reputation.  Our job is to eliminate that risk.

Following a review of your lease terms, Liberty Leasing can put together an exit framework and negotiate the terms of your exit with your Landlord. The most common options are subleasing your space (part or all), assigning your lease or negotiating terms for a surrender of lease.

Early Exit Options 

Subleasing can be a great option. In some circumstances it is even financially beneficial.  For example: Imagine that you no longer need your entire space because your company has recently undergone an internal restructure. If you sub-lease part of your space to a third party for the duration of the lease term you are actually monetising the space which was ordinarily being wasted. Now your lease is a passive income stream.

Alternatively, you can transfer the remaining term of your lease to another party through a processed called an assignment of lease. Following an assignment, but subject to the relevant legislation or deeds of covenant, you will be released from your obligations under the lease. This means that you don’t have any further liability.

A lease will almost always contain a requirement for Landlord approval and consent prior to dealing with your premises in the manners set out above. It will also set out conditions which must be satisfied before the Landlord is required to give its approval.  We assess the individual circumstances and the lease terms to ensure you are best placed to obtain Landlord approval.

Another possible solution is negotiating a surrender of lease. Generally a Landlord will require a surrender fee in exchange for ending the lease early. However, Landlord’s also have an obligation at law to mitigate its loss as a result of early surrender.  We have the experience to balance these rights and obligations.  This experience translates into assurance that your surrender arrangement is competitive in the current market and that you aren’t paying too much.

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