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 Vermont, a business that intends to lease commercial space—such as offices, warehouses, or retail locations—will typically enter into a commercial lease agreement. Unlike residential tenants, commercial tenants are presumed to have greater knowledge and sophistication in business matters, and therefore, they are afforded fewer legal protections under the law. The onus is on the commercial tenant to thoroughly review, understand, and negotiate the terms of the lease agreement. Every clause in the commercial lease can significantly affect the business's operations and financial health. It is crucial for the tenant to ensure that the lease terms are favorable and to seek any necessary amendments before signing. The ability of a commercial tenant to terminate the lease early is largely governed by the specific provisions of the lease agreement itself. Therefore, it is advisable for a commercial tenant to consult with an attorney to fully grasp the implications of the lease terms and to negotiate any necessary changes that could provide additional protections or flexibility.