A business that leases real estate and improvements (buildings, etc.) in the form of space for offices, a warehouse, a restaurant, a nail or hair salon, a clothing store, a coffee shop, or other commercial (nonresidential) space will usually be required to sign a written contract known as a commercial lease agreement.
The tenant (the business occupying the space) who signs a commercial lease agreement is generally expected to be a more savvy, sophisticated, and informed tenant (also known as a lessee) than a tenant in a residential lease, and the law usually does not provide a commercial tenant with the same protections as residential tenant receives.
Because the law does not provide a commercial tenant with many protections, it is up to the commercial tenant to read, understand, and negotiate protections in a proposed lease agreement before signing it, as most every paragraph in a commercial lease agreement can have a significant impact on a business’s operations and financial stability.
As with most other questions, a commercial tenant's ability to break or terminate a lease before the end of the lease term depends primarily on the terms of the written lease agreement.
In New York, businesses entering into commercial lease agreements for various types of spaces, such as offices, warehouses, or retail locations, are expected to engage in these transactions with a higher degree of knowledge and sophistication than residential tenants. New York law typically offers fewer protections to commercial tenants compared to residential tenants, placing a greater onus on the business to thoroughly review, understand, and negotiate the terms of the lease. It is crucial for a commercial tenant to be proactive in securing favorable lease terms, as the lease agreement will significantly influence the business's operational and financial well-being. The ability of a commercial tenant to terminate a lease early is largely determined by the specific provisions of the lease agreement itself. Therefore, it is often advisable for a business to consult with an attorney to ensure that the lease terms align with their interests and to understand the implications of the lease on their business.