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Commercial Leases: The Right to Relocate

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Signing a commercial lease is probably one of the most important things business owners do when they acquire or start a company. One main reason why the lease is so important is that they often come with a “right to relocate” clause, and business setup in Seattle and throughout the Northwest can become complicated when a landlord exercises his or her right to relocate your business.

What is a “Right to Relocate” Clause?

Simply put, a “right to relocate” clause allows a landlord to relocate a business inside his or her property to another location. This clause may cause lease signers some anxiety because it sounds like their landlord could force them to move at any time. There are, however, laws in place governing a landlord’s ability to exercise the “right to relocate” clause in their lease agreements. Commercial lease signers can also hire a transaction attorney in Seattle to ensure some protection against this clause.

How to Protect Yourself

To start with, leaseholders should never sign a commercial lease for their business without first reading the contract and involving a contract review attorney in Seattle. There are three major issues involved in “right to relocate” clauses in lease agreements, and they are

  • Who pays the cost of relocation
  • Where will the business be relocated to
  • What are the options for canceling the lease

Not all commercial lease contracts state the landlord is responsible for paying for the relocation. If your lease doesn’t spell this out clearly, it’s in your best interest to negotiate with the landlord so that if he or she does choose to move your business, you are not paying for the move. It’s also wise to involve a business lawyer from Seattle right from the very beginning.

The commercial lease contract you sign should also have terms in place requiring the relocation site to be comparable to the old one. This includes a building or space that is the same size and configuration as the previous site.

Lastly, there should also be terms that give you the option of canceling the lease agreement if certain terms are violated. Usually, a commercial lease contract can be canceled without penalty if a landlord moves a business to a smaller location or to a site inferior to the old one. These terms need to be explicitly written out in the contract so your rights are clear to everyone involved.

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