What Happens if I Break a Commercial Lease?

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What Happens if I Break a Commercial Lease?

A commercial lease is a contract between the owner of a commercial property—e.g., a storefront or office suite–and the business that rents the property. Like a residential lease, a commercial lease sets forth the specific duties and responsibilities of each party to the contract with respect to the usage of the property, payment for the property and any related expenses, and the duties of each party to repair and maintain the property. The lease also details what constitutes breaking or materially breaching the lease terms, as well as the consequences of a material breach.

In most cases, a material breach of a commercial lease results from the tenant’s non-payment of rent or other costs as agreed, abandoning the property prior to the end of the lease, or violating other terms and conditions that are specifically outlined in the lease. The consequences of breaking a commercial lease are outlined in the lease, but there are some Arizona state laws that also govern this situation. For instance, a landlord has the right to terminate a lease or retake physical possession of the property if the tenant fails to pay rent or violates any other lease provision. However, Arizona case law is clear that the landlord cannot terminate the lease based on an immaterial or trivial breach of a lease provision; rather, the breach must be material, substantial, and continuing. This is the case even if the lease itself specifically provides for the landlord’s right to terminate the lease upon breach of any provision in the lease. In some cases, the landlord’s behavior may influence his or her right to terminate the lease, even if the tenant has materially breached the lease; continual acceptance of late and partial rent payments is one example where a landlord might be unable to terminate a lease for non-payment of rent.

If you have questions about your rights and responsibilities with regard to commercial leases, or any other business-related issues, you will greatly benefit from calling us today and getting the advice that you need. Williams Mestaz,, L.L.P., has the experience and technological knowledge that is invaluable when preparing your case. When you need answers, contact Williams Mestaz, L.L.P., today at (602) 256-9400. We focus our efforts on business and contract disputes, so we know how to protect your rights and build a strong case on your behalf.

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