Can Your Lease Save Your Business from Getting Derailed?

This week, Tel Aviv started construction of the city’s first light rail. The long-delayed $4.23 billion project is slated for completion in 2021 and is expected to cause years of gridlock within the city and for miles around.

Some roads have been closed, some have been turned into one-way streets, and some have been closed to private vehicles. Nine-foot-high temporary walls will be set up about five feet from the entrances of many businesses, blocking them from view.

Fearing the Worst

The Jerusalem Post reported that Tel Aviv business are fearing the worst.

Our office is right in the middle of it, but being an online business we’re not as affected. The shops around us, our neighbors, who depend on foot traffic for survival, will be the ones most hit. We’ve been around to visit them and they really do fear the worst. Their livelihoods are on the line.

StorefrontThe 56-year-old owner of a hole-in-the-wall electronics store just around the corner from us even hung a noose by the entrance, with a sign reading “waiting for my death sentence.”

So, the big question is: can you get out of your commercial lease, or get your lease payments reduced, if a massive construction project disrupts your business?

The answer depends on where your business is located, and on what it says in your lease.

Understanding Your Lease

A few things to consider:

  • Does your lease give you the right to find an alternative tenant, or to sublet the premises?(This may not help much if no one wants to take over the location, but a different business – like an online one — might not be as dependent on foot traffic.)
  • Does your lease give you the right to terminate if the normal use of the premises becomes impossible?

Before You Sign

If you haven’t yet signed a lease, you might want to add clauses like those to protect yourself from similar dramas in the future.

Some other things you can do before you sign a lease are:

  • Research whether any major construction projects are scheduled for the area, and what impact they’re expected to have on traffic patterns, parking, etc.
  • Consider negotiating a shorter-term lease so you can get out of it earlier if something unexpected happens.(Of course, the tradeoff is that your landlord may be able to raise your rent more if you decide to extend the lease.)

If you want to understand your commercial or residential lease before you sign it, you can get fast feedback at www.lawgeex.com. We’ve created this service exactly for these situations – to help people understand their contracts before they sign them, reducing the risks down the road.

The information and materials in this blog are provided for general informational purposes only and are not intended to be legal advice. 

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