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Writer's pictureCalla Norman

How to break a bad lease for your small business



Did you move into a space for your business and decide the grass is greener elsewhere? It happens! Sometimes the foot traffic isn’t what you thought it would be where you are, or maybe you have a less-than-sweet relationship with your landlord and would prefer to work elsewhere. 


Hey we get it - sometimes there’s no place like another home. If you’re in a bad lease - or it’s just not the right fit for your business, here are a few tips about how to get out of a bad lease. 


Understand Your Lease’s Terms


Make sure you read the fine print. Thoroughly review the lease agreement to comprehend its terms, including clauses related to early termination, penalties, or renegotiation options. You might be eating a little of your investment, but knowing exactly what you’re responsible for and entitled to can help you hold strong against your landlord. 


Have Open Communication and Negotiation with Your Landlord


Initiate open communication with the landlord or leasing agency. Discuss your challenges and propose potential solutions, such as subleasing the space or renegotiating terms. Be open and respectful, but make sure you also know what you’re talking about (see tip #1). 


If Necessary, Seek Legal Advice


It might be a good idea to consult with a lawyer specializing in real estate or business law. They can provide guidance on your options and the legal implications of breaking the lease, and help break down any confusing language in the lease. 


Document Everything about New Lease Negotiations


Keep meticulous records of all communication regarding attempts to negotiate or find alternatives. Documenting agreements and discussions is crucial for clarity and reference. Make sure you get as much information as you can in writing - save your emails and texts with your landlord too! 


Consider Financial Implications


Calculate the financial impact of breaking the lease. It’s possible you’ll have to pay a bit more - is it worth leaving? Prepare for potential penalties, remaining rent payments, or any other costs associated with termination. If it makes financial sense to leave now and move onto other things, you can consider these penalties an investment in your next step. 


If You Need Funding to Move Out, Ask Your Community! 


Lots of small businesses use their Honeycomb Credit investment offerings to move into new spaces - just because you’re leaving an old one doesn’t mean you can’t invest in something bigger and/or better for your business! Learn more about Honeycomb Credit by filling out the form below: 




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