A lease is the most common, yet least understood, contract a human-owned business will sign, so a post on exit planning for leases is going to be helpful whether you are trying to get out of or in to a lease. Exit planning, by the way, isn’t limited to just the owner’s exit from the business. How key relationships, including the one with your landlord, end is a subject deserving forethought in any business.
I blame professional sports for the unrealistic expectations some businesses have toward contacts, including leases. If you regularly hear about the rising star athlete who gets out of the contract signed when he or she was a bit more humble, you might get the impression that your business can get out of a contract whenever a better offer comes your way.
That your business is suffering, or rent is lower across the street (or even in your building), is generally of no concern to your landlord--other than at renewal time. Supposing the landlord is willing to do something for you, chances are the landlord has its own contract it can’t get out of—a mortgage. Your lease is part of their collateral, so the landlord’s lender has much less interest in helping you out of the lease, than in helping you in.
In Part 2, I’ll cover three more options for getting out of a lease: Assignments & Subleases, Landlord Take Backs, and Extending the Term.