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Can a Commercial Landlord Back Out of a Lease?

This question came to us via Avvo. A prospective commercial tenant signed a lease agreement with a landlord for business premises for the tenant's new business, paid the security deposit, and even gave two weeks' notice to their existing job -- only for the landlord to then tell the tenant that he had decided to rent to someone else after all! The tenant wanted to know if he had any legal recourse against the landlord for backing out of the lease.

Our answer is that based on these facts, the landlord appears to have committed a breach of contract, which is legally actionable. The tenant had a signed written lease agreement with the landlord, paid him the security deposit, and then the landlord reneged on the agreement. On its face, that is almost the textbook definition of breach of contract.

The most readily apparent item of damages is the security deposit. However, the tenant may also have other rights and remedies. This is why it's always good to consult with an experienced landlord-tenant attorney: among other things, the attorney can review your case and determine if there may be additional damages you can sue for that may not be immediately obvious or may not have occurred to you.

In this case, since the tenant was just about to start a new business, he would probably have a tough time proving up a loss of income claim. That's not to say it can't be done; it's just that you face some obstacles along the road to proving in court that you would have made $X additional money but for the wrongdoing by this landlord. This is another aspect that a good attorney can assist with: evaluating your claims and damages and helping you make a sound cost-benefit decision about what is and isn't worth suing over. At Cooledge Law, we strive to provide advice that truly helps the client, rather than just telling people what they want to hear to get them to go to court and run up the legal fees. We take great pride in staying out of court where possible, in not hesitating to file suit and take someone to court where necessary, and in helping our clients balance the two ever-present competing concerns of "I want to stand up for my rights" and "will this lawsuit really be worth it."

Anyone who finds themselves in the situation of the tenant described here would be well advised to consult with a good landlord-tenant attorney. If this sounds like you, don't hesitate to reach out and contact us.

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