Can your commercial landlord stop you from changing businesses?
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Can your commercial landlord stop you from changing businesses?

| Jan 5, 2021 | Uncategorized |

Some businesses continue to offer the same products and services for their entire existence, while other businesses have to change to stay profitable. If you have noticed less demand for your goods and services or if the industry in which you currently operate is likely to decline in the future, finding new products to manufacture or providing new services can help you remain competitive. However, you may need to change industries.

Many different business factors can influence the success of a rebranding or change in focus. Finances, supply chain issues and competition are all influential. However, the property where you conduct business can also play a role. Specifically, the lease you have with your landlord might limit your options if you want to change your type of business.

Many commercial leases have terms limiting the use of the property

Commercial landlords often have properties worth more money and at risk of more damage and liability than those held by residential landlords. Their leases often include more complicated terms to protect them from the risks associated with commercial rental properties.

Limiting the use of the space is one way for a landlord to protect themselves. They might limit the times of the day when you can occupy the space, the number of people you can have in it, the kinds of equipment you can run or the types of chemicals you can use. Any of these limits could potentially affect your business’s transition to another industry.

Leases don’t have to determine your company’s future

The good news is that you can potentially renegotiate the lease and ask your landlord to adjust the terms to reflect your current business model and goals. In some cases, you may need to take action to get out of your existing lease. Getting experienced legal assistance with those negotiations and with the process of reviewing your lease can help you avoid a possibly expensive violation of your rental agreement.