Depending on the lease term, there are various procedures for ending up your business lease. You must be aware of few important factors like whether the procedure was started by the tenant or the landlord, whether the entire term of the lease has expired or not. Here are some effective methods for ending up a lease properly:
Possession or Vacate: There must be a mutual agreement between the landlord and the tenant before the lease procedure starts. The agreement must be recorded in hard copies or soft copies for convenience of both the parties in the future. If the lease needs to be terminated before the expiry date, both the parties must come to an agreement. In the lease agreement, there must be a clause regarding the break, and all the rules will be followed according to that particular clause. According to the term, the tenant can acquire possession or need to vacate after the end of the lease.
Vacate on Last Day: If the tenant does not want to continue beyond his exact lease term, he may vacate the property just on the last day of the term. This process will not require an early notice to the landlord. He will just have to return the keys and leave the property. But when the tenant wants to continue with the occupancy, and end the lease at a later date, the lease must be terminated with an agreement. The agreement can be followed by the legal sections from 24 to 28 in the Landlord Tenant Act of 1954. The tenant can also serve a written notice before three months of the expiry of the original term.
Tenure Security: The tenant remains under the security of tenure, unless both the tenant and the landlord have opted for contracting out of the sections. The security of tenure can be offered automatically when the lease term is more than 6 months or the occupancy of the tenant is more than 12 months. The tenure security also provides a right of the tenant to be offered with a fresh lease. It also provides the right to stay in the property though the fixed term is expired.
Periodic Tenancy and Hold Over: The tenancy may run from one period to another. During that specific period, the rent payments can be done either monthly or yearly. During the period, the tenant is required to hold over a few terms unless the landlord and tenant mutually agree with the new lease or rent or the landlord serves a notice for seeking possession.
Vacate during Lease Period: Tenant may wish to leave the property before the expiry of the lease period. A written notice of section 27 must be served to the landlord in this case. Generally, the tenant can only leave when the lease period is over, but a notice can be served before 3 to 4 months for this purpose if rents are paid monthly. If the rent is paid quarterly, notice must be served between 3 and 6 months.
Objection for a New Tenancy: There can be many grounds for the objection of new tenancy. If the landlord wants to reconstruct or demolish the property or he wants to occupy the premises for his personal purposes, the court will provide mandatory possession with solid proofs.
For a business lease, you will require several legal documents and notices that must be signed by the agreement of both the parties. Both the landlord and the tenant must go through all the clauses and appeal to the court if they want any modification in any of the clauses. The business lease can only be ended earlier if the rules are mentioned in the break clauses of the agreement.
Author Bio: Daniel Roberts is a well known financial advisor who works at leasequit.com. In this article, he is providing some tips for ending the business lease before the expiry date.