Some Legal Issues to Consider When Trying to Get Out of Your Office Lease [SUBSCRIBERS-ONLY]

As the financial pressures on nonprofit organizations mount and many employees continue to work remotely from home, nonprofits are increasingly examining their options for getting out of their current office leases. This issue is particularly problematic for nonprofits whose current office leases are set to expire years into the future. A careful assessment of your organization’s legal rights and options is critical to navigate this issue effectively.

This post will highlight a few key issues to consider, but it is especially crucial to get specialized help from local commercial real estate experts. Commercial leases are very complex and specialized, and the laws and real estate market conditions vary depending on the state or local jurisdiction. A commercial lease broker and/or real estate attorney are essential to help you assess your organization’s rights and bargaining leverage.

Assuming your landlord is not willing to negotiate modifications to your current lease, you might consider whether subletting all or a portion of your space is a possible option. This may be the solution that your landlord is most willing to accommodate, although this puts all of the burden on your organization to find a suitable sub-tenant willing to move into the space (no easy task in this environment, although your commercial lease broker may be able to help). Landlords generally have discretion over whether or not to approve a proposed subtenant, so plan accordingly to involve the landlord in this process.