REALWorld Law

Commercial leases

Early termination

Can a tenant be forced to leave prior to the date originally agreed and, if so, how long will this process take?



Early termination without cause

If a lease does not specify the lessor's right to early termination without cause, the lessor may not terminate the lease early.  Where the lease does contain such a clause, ‘due reasons’ must also be provided by the lessor in order to terminate the lease early.  ‘Due reasons’ for purposes of early termination are difficult to establish.  In addition, six months' prior notice of the early termination must be provided to the lessee by the lessor.

Early termination with cause

Where there exists cause for the lessor's early termination of the lease (eg due to the lessee's breach of the lease), the lessor may only terminate the lease early if the ‘trust relationship’ between the lessor and the lessee has been destroyed as a result of the cause.  The destruction of the trust relationship can be classified as a ‘due reason’ for termination.