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PTaubman · Nov 27, 2006, 09:02 AM

Greetings -

My wife is starting her own business and will be renting space above a dentist (who owns the building). He wants to lease the office space for 2 years. We are OK with doing that, however, I want to protect myself in the even the business does not work out ("Expect the Best :D , Prepare for the Worst :( ).

Where can I find a sample Break Lease clause that basically says, "This lease can be broken if the business is not successful". We are willing to be fair and provide 2 months notice.

Thanks!

Paul.

excon · Nov 27, 2006, 09:10 AM

Hello PT:

I don't think you understand what a lease does. It protects both parties. You want the lease to protect you, but not him. If you can break it because you can't afford it, why shouldn't he be able to raise the rent because he can't afford his children's private school tuition? That's a fine arrangement if you both agree. It's called month to month.

You're not going to find such a clause, because it's nonsense. However, you can write it in, exactly like you've presented it here, and if the dentist signs it, you're in.

excon

Cvillecpm · Nov 27, 2006, 09:47 AM

Dentist won't sign that lease... you should make sure you have the right to ASSIGN or SUBLET the space in case the business does not work...

PTaubman · Nov 27, 2006, 10:23 AM

Originally Posted by excon

Hello PT:

I don't think you understand what a lease does. It protects both parties. You want the lease to protect you, but not him. If you can break it because you can't afford it, why shouldn't he be able to raise the rent because he can't afford his children's private school tuition? That's a fine arrangement if you both agree. It's called month to month.

You're not going to find such a clause, because it's nonsense. However, you can write it in, exactly like you've presented it here, and if the dentist signs it, you're in.

excon

That is surprising. I have dealt with Computer Consultant contracts for 2 decades. Even though the contract is for a year, there is still a clause that allows either party to cancel with 30 days notice. I understand that you are saying that this is not the case in real estate.

Thanks for your information.

Cvillecpm · Nov 27, 2006, 02:15 PM

A retail "consumer contract" is not a lease.

In asking for such a clause, you are advising your would-be landlord that you may FAIL in your business so he may then ask for a personal guarantee and/or higher security deposit... seek a way out of the lease through subletting rather than telegraph your misgivings about your new venture.

excon · Nov 27, 2006, 03:19 PM

Hello again, PT:

Actually Cville is right. If you put the landlord on notice that you don't have a great deal of faith in the business, he won't either. Indeed, he may ask for a personal guarantee and a large deposit. I would.

excon

ScottGem · Nov 27, 2006, 03:33 PM

A computer consultant contract is a very different matter. If the Consultant wants to back out, 30 days is a sufficient time to find a replacement. On the flip side, the consultant can often find another assignment within 30 days.

But a real estate lease is a different matter. The landlord want to be able to count on the income for a specific period. The idea of a lease is to provide that guarantee.

However, its not true that there is no such thing as an escape clause for a lease. The landlord may be willing to provide such a clause. Depending on how rentable the property is, the landlord may require a 3-6 month payment to allow early termination. (a 60 day notice is not necessarily "fair". Depends on the local market.)

There is no standard clause however. Its just something you need to work out with the landlord. But CVille does have a point about the message you are sending to the landlord. You might be better off just make sure you have the ability to sublet.

Fr_Chuck · Nov 27, 2006, 03:55 PM

You can ask for any clause in a lease you want, but if he is not going to be sure to have a two year lease, all he has is a basic month to month with a two month notice, and he can and should expect much higher rents for such a contract.

But you can ask him, but remember he is supplying the lease for you to sign, you are not supplying him a lease, so you have to ask for what you want and see if he will add it to his lease.

Honestly unless he just knows you and likes you, he would not agree to such terms,