If you are a commercial landlord in Massachusetts and your lessee is breaching the terms and conditions of the lease, you have rights as a landlord. Commercial leases are binding agreements, and if your lessee is not upholding their obligations under the contract, they can be brought into compliance or held accountable for their actions.
The commercial real estate lawyers at the Katz Law Group have over 40 years of experience handling commercial lease disputes from the landlord's perspective. How you initially react to a potential breach of the commercial lease can make a big difference in the eventual outcome. Generally, landlords should investigate the problematic conduct and review the lease to ensure it is being breached, talk to the tenant about the violation, and then escalate the situation as appropriate if it remains unresolved.
1. Due Diligence
The first thing to do if you suspect that your commercial tenant is breaking the lease is to investigate and see if your suspicions are true or not. Taking any action based on a rumor that turns out to be unsubstantiated can strain the landlord-tenant relationship. Depending on the situation, due diligence can include:
- Visiting the property openly
- Surveilling the property in secret
- Talking to employees, vendors, or customers about the property and what is being done on it
If the problematic conduct is, in fact, occurring, the next step is to check the terms of the lease to see if the conduct is prohibited. In some cases, like if the lessee is not paying rent, it is a clear violation of the lease. In others, it is more ambiguous.
2. Negotiations
Generally, the next step is to open a dialogue with the commercial lessee about the breach of the lease. Landlords can do this even if the conduct does not expressly break the contract – they will just have less leverage in the negotiation.
In many cases, pointing out to the lessee that they are violating the lease is enough to get them to stop.
3. Escalation
If a discussion does not solve the problem, landlords have the right to escalate the situation and take legal action to enforce the lease. What steps to take will depend on your specific situation and the context. Some important practical factors to take into account are:
- Your history with this particular tenant
- Whether they have paid rent in full and on time in the past
- How much of the lease's term is remaining
- How quickly you think you could rent the property to someone else
- Whether the breach is because of the tenant or something out of the tenant's control
According to real estate attorney David S. Katz, “Legally, a commercial tenant's breach of the lease means that the landlord has all of the leverage. Practically, though, it is not always in the landlord's best interest to invoke all of their rights to the fullest. Compromise within reason is often the best course of action, in the understanding that the next commercial tenant might be even worse.”
If no compromise is possible, landlords should be prepared to file the necessary paperwork to evict the commercial tenant.
Massachusetts Real Estate Lawyers at the Katz Law Group
Call the experienced real estate lawyers at the Katz Law Group for help in central Massachusetts at (508) 480-8202 or contact them online.
