smallbusiness.co.uk: Helping your business think big

Tricky, after all it's a contract you have signed and your landlord could go to court to enforce it. And probably would if your business is going well and therefore able to pay the rent. Sometimes, business expansion does lead to higher property costs than you would like but you have to factor that into your business plan.

First, find out if you can sublet it according to your contract. If not ask your landlord if he would agree. With sub-letting all the liabilities with the contract are yours.

You could also consider finding another tenant and assigning the contract if your landlord would agree, but this might also lead to some liabilities remaining with you.

I think your first step is to ask your solicitor to go through the contract to see if either option is open to you. If they are not, you would need to try and negotiate a way out with your landlord who will obviously look for some extra compensation from you. Of course, it may be that your rent is low and that the property market has moved meaning that your landlord could get a higher rent now. Find out if this is the case, as this will help your negotiating stance.

If the contract is rigid and your landlord intractable, you have two options. Work out if there is any way that by clever use of space you could stay where you are. Look around to see if there is any smaller space available in a nearby building, which you could rent on a very short-term basis and consider putting part of your staff there. Splitting a team is never ideal and you would have to work hard to overcome the potential loss of moral and communication problems by organising company and team meetings, both formal and informal.

If you can work out a compromise for a few months, you may still have to accept that you will need to start renting your new larger office which would accommodate all of you before you have been able to break your contract in fifteen months time. But as I said higher property expense than you would like is a cost of a growing business.

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