Starting a Business

As a landlord, can I terminate a commercial lease due to an unfit lessee?

One of the lessees failed a criminal background check. Can I terminate the lease with just that that person and keep it with the other qualifies lessees?
min read
Opinions expressed by Entrepreneur contributors are their own.
As a landlord, you have the right to carve out certain pre-conditions to leasing your premises—such as a clean criminal background check or a credit check.

If you did not carve out these exceptions, you do run the risk of breaching a lease—particularly if the corporate tenant has been paying rent timely, not creating a fuss and the criminal activity has little to do with current operations (e.g., one of the partners was busted for a DUI eight years ago).

You may be able to work out an agreement with the tenant company whereby they voluntarily agree to leave ("surrender") the premises, so that you can take back the premises without a fuss. If thats the case, you'd want some assurances from the tenant's owners that they have sufficient voting rights and authority to make that decision without the third partner.

But all that should be clearly documented. Make sure you have able legal counsel helping you through this.

More from Entrepreneur

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

Whether you are launching or growing a business, we have all the business tools you need to take your business to the next level, in one place.
Enroll Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.

It Started As a Joke and Turned Into a Startup That Raised $1 Million in Funding