What are the costs that could be incurred when a lease is surrendered early

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    What are the costs that could be incurred when a lease is surrendered early

    Our commercial tenant wishes to surrender their Full Repairing lease 1 year early to move to much smaller premises. As well as costs associated with dilapidation and legal fees, what other financial implications could there be for them? A significant part of my income is from this tenant so I don't want them to think surrendering a lease is as inexpensive as they think.

    #2
    The first point to make is that you are not under any obligation to accept a surrender. That means you can set the terms. However, the tenant is not going to surrender if any premium you demand does not make it make it worth his while. What he is prepared to pay is for him going to be part of the overall cost of downsizing. It is down to negotiation. If you do not like what the tenant is prepared to pay then you decline to surrender. The important thing is to negotiate a clean break with dilapidations and costs all agreed and documented.

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