Commercial leasing
Surrender and ending a commercial lease early.
Walking out does not end a lease, and it can leave you liable for the rent for the rest of the term. CMK Legal in Richmond advises tenants and landlords across Victoria on surrender, assignment and the safest way to hand back premises early.
Solicitor-reviewed
Exit options reviewed by a Victorian commercial lawyer.
Fast turnaround
Advice back within 2 to 3 business days in most cases.
Fixed fee, quoted first
Fixed fee, quoted before we start.
Victorian leasing law
Grounded in Victorian leasing law and VCAT practice.
The ways a lease can end early.
A lease can be brought to an end early by agreement between the parties, known as a surrender, or it can come to an end by operation of law where a tenant abandons the premises and the landlord accepts that abandonment.
Abandonment is the expensive route. If a tenant simply leaves, the lease continues until the landlord accepts it is over, and the landlord may then claim damages measured by the rent for the remainder of the term.
Assigning the lease to an incoming tenant, or subletting the premises, is often a cheaper exit than a negotiated surrender because it keeps the rent flowing and the landlord satisfied.
If the business is closing or moving, the route out is worth planning before you stop trading. The options and their cost look very different once the premises have already been abandoned.
Why the exit route matters.
The safest way out is identified
Surrender, assignment and sublease each end your involvement differently. Choosing the right one for your premises and the market keeps the cost of leaving down.
Your liability is quantified first
Walking out can leave you liable for rent for the rest of the term. Knowing the exposure before you act lets you decide between negotiating a surrender and finding a replacement tenant.
A surrender is properly documented
A surrender by agreement releases you cleanly only if it is documented, covering make-good, security and any payment. A handshake leaves the liability hanging.
Assignment is weighed as a cheaper exit
Passing the lease to an incoming tenant often costs less than buying your way out. Where the premises are attractive, it can be the better route.
Walking out does not end the lease.
Handing the keys back does not end a commercial lease. If a tenant abandons the premises, the lease continues until the landlord accepts that abandonment, and the landlord may then claim damages measured by the rent it would have received for the remainder of the term. Walking out is therefore one of the most expensive ways to leave, because the liability can run for years rather than ending when trading stops.
A surrender by agreement is the clean alternative, where the landlord agrees to take the premises back and the parties document the release. A landlord will usually want something in return, and questions of mitigation, re-letting and make-good all feed into what a surrender costs. In many cases assigning the lease to an incoming tenant, or subletting the premises, is a cheaper exit than a negotiated surrender, because it keeps the rent flowing and the landlord satisfied. Which route is best depends on the strength of the premises, the state of the market and what the lease actually permits.
Talk to us if.
- The business is closing or moving and the lease still has time to run
- You want to hand the premises back before the term ends
- The landlord has offered a surrender
- You have already stopped trading or vacated
- You have a buyer or incoming tenant who could take the lease
- You are a landlord dealing with a tenant who has walked out
- You want to understand your liability before you decide
- A guarantee or security is tied up in the lease you want to exit
The cheapest exit is usually the one planned before you leave. If you have already vacated, we can still tell you where you stand and how to limit the liability.
How we help with an early exit.
- 01
Send us the documents
The lease, any guarantee, and details of why and when you need to leave.
- 02
Scope and fixed fee
We scope the exit options and quote before starting.
- 03
Weigh the options
Surrender, assignment and sublease are compared against your liability and the market.
- 04
Talk it through
We explain the cheapest safe route and what the landlord is likely to want, by phone.
- 05
Act if instructed
If you want us to, we negotiate the surrender or document the assignment or sublease.
Fixed fees for early exit advice.
Advice on exiting a lease early is quoted as a fixed fee once we have seen the documents, with a call included. Negotiating a surrender or documenting an assignment is quoted separately before any cost moves.
FAQs
Surrender and early exit FAQs.
Still unsure? Call us on (03) 9008 7224 and speak to a lawyer, not a call centre.
Can I just walk out of my commercial lease?
What is surrender by agreement?
Will I owe rent for the whole remaining term?
Is assigning the lease a better exit than surrender?
I am a landlord and the tenant has left. What are my options?
Related services.
Lease assignment & transfer
Transferring a lease when a business is bought or sold, with consent handled properly.
Learn moreSubletting
Granting a sublease, landlord consent, and why the head tenant stays liable.
Learn moreLease disputes
Breach notices, rent arrears, repairs and VCAT proceedings resolved commercially.
Learn moreMake-good obligations
What you must return the premises to at the end of the term, and what you can resist.
Learn moreFind the safest way out.
Start online or book a consultation with a CMK Legal commercial leasing solicitor in Richmond, Melbourne.