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 North Dakota, a business that intends to lease commercial space for various purposes such as offices, warehouses, or retail stores will enter into a commercial lease agreement. Unlike residential tenants, commercial tenants are considered more knowledgeable and are expected to conduct due diligence before signing a lease. North Dakota law does not provide the same level of protection to commercial tenants as it does to residential tenants. Therefore, it is crucial for the commercial tenant to thoroughly review, understand, and negotiate the terms of the lease agreement. The ability to terminate a commercial lease early is typically governed by the specific provisions within the lease contract itself. It is advisable for a commercial tenant to consult with an attorney to ensure that their interests are adequately protected and to understand the implications of the lease terms on their business.