January 17, 2012
Be Careful Before Breaking A Commercial Lease
Given the current state of the ecomony, many commercial tenants are deciding to brake their commercial lease in hopes of starting over somewhere where the rent is much cheaper. As an Atlanta corporate lawyer, it can often be the wrong move to believe that you can simply walk away from a commercial lease.
Under Georgia residential leases, the landlord is required to mitigate its damages by trying to find another tenant to rent an abandoned unit. Under commecial leases, the landlord is not required to do so and therefore has every right to keep your space abandoned and seek full rent through the duration of your commercial lease.
For this reason and many others, it would be prudent to have an atlanta litigation attorney review your commerical lease before deciding to break it. Often times, it is more prudient to have an atlanta attorney negotiate a release from your commerical lease. For example, your lease most likely has an acceleration clause allowing the landlord to accelerate the entire amount of the rent that would be owed under the commercial lease and then pursue your company for the entire balance. In addition, more likely than not, you or your partners signed personal guarantees of the commercial lease subjecting you to personal liability for the entire amount owed on the lease agreement.
Litigation is always a last resort. Especially in the area of commercial leases. It is often much easier to negotiate a release whereby you pay for several additioanl months of rent after you have left instead of simply abandoning the property. A lawsuit by your landlord would include attorneys’ fees and interest making your exposure even greater.
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