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Q: Our business went south, and as a result we had to break our lease. Less than 30 days later, the landlord rented the space to a new tenant. Six months after that, we were served with papers demanding $12,000, which is the remaining rent on the lease. Is it legal for the landlord to collect rent from both new and old tenants?


A: By Adriana Gardella, FORTUNE Small Business senior editor
The answer depends on your lease terms. As you describe it, the situation sounds unfair, but that doesn’t make it illegal, says lawyer Hanna Hasl-Kelcher, author of The Business Guide to Legal Literacy: What Every Manager Should Know About the Law.

Generally, a tenant must pay rent until the lease term expires. Moving out early won’t end that obligation unless you have a different agreement with the landlord - preferably in writing. Although some agreements may provide that the landlord can find a new lessee before the broken lease expires and use the new tenant’s rent to offset the amount owed by the departing tenant, you shouldn’t act on this assumption. “This type of provision must typically be negotiated,” Hasl-Kelcher says.

Have an attorney review your lease and discuss possible defenses to your landlord’s claim. Typically, you’ll face a penalty for breaking a lease, says Elizabeth Milito, a lawyer with the Small Business Legal Center, which is operated by the National Federation of Independent Business in Washington, D.C. Even if your landlord reduced his or her damages by the amount of the new tenant’s rent, in many states it is the former tenant’s responsibility to prove that damages should be limited, she adds. There are other damages you may be obliged to pay, such as your landlord’s attorney fees and expenses incurred in finding the new tenant.

Next time review your lease carefully before signing. “Commercial leases typically provide more room for negotiation than residential leases,” Milito says. “Don’t be afraid to request modifications.”


Source: http://askfsb.blogs.fsb.cnn.com/2009/03/30/my-landlord-wants-rent-on-a-broken-lease/