A Law Firm Built On Integrity, Perspective And Results

4 ways to deal with lease agreement breaches

On Behalf of | Oct 16, 2023 | Commercial Real Estate

Commercial property owners often face the challenging situation of dealing with lessees who break their lease agreements.

When confronted with this issue, it is important to take prompt and decisive action to protect your property and financial interests.

1. Review the lease agreement

Begin by thoroughly reviewing the lease agreement signed by both parties. Pay close attention to the terms and conditions, especially those related to lease violations and early termination. Understanding the specific clauses breached will help you determine the appropriate course of action.

2. Notify the lessee in writing

After identifying the lease violations, communicate your concerns to the lessee in a written notice. Clearly outline the breaches and their consequences, emphasizing the importance of adhering to the lease terms. Specify a reasonable time frame within which the leasee must rectify the violations or vacate the property.

3. Evaluate financial implications

Calculate the financial impact of the lessee’s breach on your commercial property. Consider lost rental income, repair costs and any other financial losses incurred due to the violation. This assessment will help you determine whether pursuing legal action is necessary.

4. Seek a resolution or termination

Depending on the severity of the breach and the lessee’s response, you can either negotiate a resolution or proceed with lease termination. If the leasee is willing to rectify the violations and meet their obligations, consider drafting an amended agreement. Alternatively, if the lessee fails to comply, initiate the eviction process per local laws and regulations.

With Cincinnati commercial real estate sitting at a high vacancy rate of 25.5%, a failure to resolve a lease breach may require taking legal action to help protect your investment.