Milwaukee, Wisconsin Commercial Lease Litigation Attorneys
In a perfect world, a commercial lease agreement would speak to every potential issue that might develop during the term of the lease. It would also anticipate every factor that might be present at the time of the lease’s termination. We don’t, of course, live in a perfect world. Particularly, for leases spanning relatively long time frames, “odds and ends” may need to be addressed as the commercial landlord and tenant part ways. To handle such issues, prudent parties should consider a lease termination agreement to nail down any issues that remain unresolved.
Goal of the Termination Agreement
While each situation varies somewhat, the goal of a lease termination agreement is to provide clarity and resolution regarding all open issues between the parties. Typical lease termination agreements include the following:
- If the tenant is vacating the premises prior to the end of the actual term, any compensation to be paid to the landlord in consideration of the early termination should be spelled out.
- Clear dates and times should be designated at which the tenant’s obligations under the lease will cease and the lease will terminate. If the surrender date is different from the termination date, it should be designated as well.
- The landlord and tenant should indicate which party is responsible for cancelling utilities.
- If the tenant is to dissemble advertising displays, signage, and other alterations (data antennae and the like), it should be noted within the termination agreement.
- There should be a clear itemization of any termination fees and other charges, such as prorated rent, maintenance fees, taxes, or utilities.
- The landlord may wish to show the premises to prospective tenants prior to the surrender of the premises by the current tenant. Conditions for such activity should be clearly included in the termination agreement.
- Specific consideration should be considered to the return (or forfeiture) of the tenant’s security deposit, if any.
- Most termination agreements provide for a mutual release of liability upon the successful completion of the terms of the agreement.
- Quite often, the parties include some sort of confidentiality and non-disparagement provisions. These sorts of provisions can protect the landlord from disclosure of confidential lease terms to prospective tenants and protect the tenant from any negative comments by the landlord to others.
Careful Drafting is the Key to Successful Termination of Lease
When appropriate termination issues are considered and provision for them made within a termination agreement, the landlord and tenant can avoid costly misunderstandings and legal disputes. By carefully crafting a termination agreement, the parties can sever the ties on an amicable basis and allow both the landlord and tenant to move forward to a healthy future. Without such agreements, the parties may need to resort to expensive, time-consuming litigation. In such instances, there are few winners – mostly losers.
Milwaukee Commercial Real Estate and Business Attorneys
Do you have commercial tenants that contemplate an early termination of their lease? Are you a tenant that wants to tie down loose issues prior to the end of a complicated commercial lease? The Milwaukee business litigation firm of Kerkman Wagner & Dunn has more than 50 years of combined legal experience representing landlords, property owners, tenants and business concerns in Wisconsin. We have represented both landlords and tenants in court following lease disagreements. Our firm has big firm talent and provides small firm attention. Call us at 414-278-7000 or complete our online contact form.« Previous PostNext Post »