I want to close my business: can I leave the premises before the lease ends?

Question

José Manuel Alburquerque · Accepted Answer

Only if the lease allows it or the landlord agrees. With commercial premises, the tenant does not have the right that a residential tenant has to leave after six months by giving thirty days' notice. If you leave without an agreement, the landlord can demand the rent for the rest of the term or, if the landlord treats the lease as ended, compensation that the judge can reduce. Before closing, try to agree your departure in writing and see whether you can assign the lease to another business, which the law allows if the lease does not prohibit it. What your lease says If it provides for the tenant to be able to leave early, it applies as written. The usual arrangement is a minimum commitment period, a notice period and, sometimes, compensation. If it sets a penalty specifically for leaving early, the “Tribunal Supremo”, Spain's Supreme Court, requires it to be paid in full, even if the landlord relets the premises straight away. It can only be reduced if the breach is not the one the clause provided for. If it says nothing, the law does not give you the right to leave early. If you leave without an agreement The Supreme Court draws a distinction according to what the landlord does: If the landlord does not accept your departure and demands that the lease be performed, he or she can claim from you all the rent up to the end of the term. The judge cannot reduce it, because it is not compensation but the agreed price. If the landlord accepts your departure, takes back the keys and treats the lease as ended, he or she can claim damages from you, such as the rent that will no longer be collected. Here the judge can reduce the amount according to the circumstances, for example how long it takes to find another tenant or how rents have moved. The rent you pay up to the end carries VAT, like any rent. What you pay as compensation for leaving early does not, according to the “Agencia Tributaria”, Spain's tax authority. Sensible ways out Assign the lease. If a business or professional activity is carried on in the premises and the lease does not prohibit it, you can assign it to someone else without the landlord's consent. This is what used to be called a “traspaso”. You must notify the landlord in a way that provides reliable proof, using a method that leaves a record, within one month. The landlord can then raise the rent by 20 %. Agree your departure with the landlord, in writing, setting out the date, the handover of the keys, the condition of the premises, what is to be paid and the waiver by both parties of any further claims against each other.