Legal Remedies When Your Commercial Lease is Breached

Your commercial lease secures the space where you generate revenue, serve clients, and build your enterprise. 

When a landlord or tenant violates that agreement, the commercial lease is breached not in theory, but in reality, disrupting cash flow, threatening tenancy, or rendering your business space unusable. This is a direct attack on your investment, and it requires a powerful response.

Your business cannot absorb the financial damage caused by another party’s failure to uphold their end of the bargain. Whether you are a landlord facing a non-paying tenant or a tenant whose landlord has failed to provide a safe and functional space, you have legal remedies. 

Securing those remedies requires a strategic approach built on California law and the specific terms of your agreement.

Enforcing your lease agreement

• A party breaches a commercial lease when they violate a material term in the contract, from failing to pay rent to failing to maintain the property as promised.
• California law provides specific legal remedies for both landlords and tenants, but the lease document itself often modifies or expands upon those rights.
• The non-breaching party typically must provide formal written notice to the breaching party, giving them an opportunity to “cure” the violation before taking legal action.
• Both landlords and tenants may have a legal duty to take reasonable steps to “mitigate damages” or minimize their own financial losses from the breach.
• A real estate attorney analyzes your lease, documents the breach, and executes a strategy to enforce your rights and fight for the financial remedy you are due.

When Your Tenant Breaches the Agreement

As a commercial landlord, your property is a significant investment. A tenant’s failure to comply with the lease directly impacts your return on that investment. While non-payment of rent is the most frequent issue, tenants can breach a lease in numerous ways.

Failure to pay rent and other charges

This is the most common breach. When a tenant fails to pay rent, CAM charges, insurance, or other contractually required fees on time, they are in breach. This material breach provides the landlord with strong grounds to take legal action to recover the money owed and, if necessary, regain possession of the property.

Violation of use clauses

Commercial leases almost always contain a “use clause” that restricts how the tenant can use the property. For example, a lease for a retail space in a quiet shopping center might prohibit the tenant from operating a nightclub. If the tenant violates this clause, they are in a non-monetary breach of the lease.

Unauthorized assignment or subletting

The lease agreement typically requires the tenant to obtain the landlord’s written consent before they can assign the lease to a new entity or sublet the space to another business. An unauthorized transfer of the lease is a clear breach and can give the landlord grounds to terminate the agreement.

A Landlord’s Legal Remedies for a Tenant Breach

When a tenant has breached the lease, a landlord has several legal remedies available under California law. The correct course of action depends on the nature of the breach and the landlord’s ultimate goal.

Seeking monetary damages

The most basic remedy is to sue the tenant for the money they owe. A landlord can file a lawsuit to recover all past-due rent and any other financial losses caused by the breach. 

Terminating the lease and eviction

For a material breach, the landlord has the right to terminate the lease and evict the tenant. This process, known as an “unlawful detainer” action, is a fast-tracked legal proceeding designed to restore possession of the property to the owner.

The “continue the lease” remedy

Under California Civil Code § 1951.4, if the lease agreement specifically allows it, a landlord can choose not to terminate the lease after a tenant abandons the property. Instead, the landlord can keep the lease in effect and continue to sue the tenant for rent as it becomes due. This remedy is only available if the lease gives the tenant the right to assign or sublet the property.

When Your Landlord Breaches the Agreement

As a commercial tenant, you have the right to a property that is safe, functional, and compliant with the terms of your lease. When a landlord fails to meet their obligations, it can cripple your ability to do business.

Failure to maintain the premises

The lease outlines the landlord’s responsibilities for maintaining the property. This often includes maintaining the roof, the foundation, and essential systems like the HVAC and plumbing. A landlord’s failure to make necessary repairs in a timely manner can constitute a breach.

Violation of the “Covenant of Quiet Enjoyment”

Every lease in California includes an implied “covenant of quiet enjoyment.” This is a promise from the landlord that they will not interfere with your ability to use the property for its intended purpose. 

The landlord can breach this covenant through direct actions (like repeatedly showing up without notice) or by their failure to act (like failing to address a disruptive neighboring tenant in the same building).

Constructive eviction

In extreme cases, a landlord’s failure to maintain the property can be so severe that it renders the space unusable. For example, a persistent roof leak that damages inventory and creates a health hazard could lead to a “constructive eviction.” 

This is a high-risk claim, but if successful, it allows the tenant to terminate the lease and move out without further liability for rent.

A Tenant’s Legal Remedies for a Landlord Breach

When a landlord has breached the lease, a tenant has several options to enforce their rights. A commercial tenant generally cannot simply withhold rent, as this could put the tenant in breach themselves.

You must take deliberate and documented steps to protect your rights when your landlord fails to meet their obligations. A methodical approach strengthens your legal position and provides the evidence needed to pursue a remedy.

• Provide written notice. Your first step should always be to provide the landlord with a formal written notice detailing the breach and demanding that they fix the problem.
• Document everything. Keep a detailed log of every communication with the landlord. Take photographs and videos of the defective conditions on the property.
• Preserve business records. Gather all financial records that show how the landlord’s breach has harmed your business, such as lost sales data, repair costs, or inventory damage reports.
• Consult an attorney. Before you take any drastic steps like terminating the lease or moving out, you must consult with an attorney to assess your rights and the risks involved.

Taking these steps creates a clear record of the landlord’s failure and your attempts to resolve the issue. This record will be invaluable if litigation becomes necessary.

Suing for monetary damages

A tenant can sue the landlord for the financial damages they have suffered as a result of the breach. This could include the costs of repairing a problem the landlord was obligated to fix, lost profits due to the disruptive condition, or the difference in value between the property as promised and the property as delivered.

Seeking an injunction

A tenant can ask the court for an injunction, a court order that compels the landlord to take a specific action. For example, a tenant could seek an injunction to force a landlord to repair a leaking roof or restore essential utility services.

Lease termination (Rescission)

If the landlord’s breach is severe and material, the tenant may have the right to seek “rescission.” This is a legal remedy that terminates the contract entirely. This would allow the tenant to move out of the property and be relieved of any further obligation to pay rent.

The Pitfalls of AI in Commercial Real Estate Law

An AI can define “unlawful detainer,” but it cannot analyze your specific lease agreement to find a subtle clause that shifts maintenance responsibilities. An AI can list the elements of a contract, but it cannot stand before a Los Angeles judge and make a persuasive argument about why your tenant’s actions constituted a material breach. 

Commercial lease disputes are fact-intensive. They depend on the strategic interpretation of complex documents and real-world conduct. Trusting an algorithm to handle a dispute that impacts your business’s physical home or a major financial asset is a critical error. 

For the strategic advocacy your case requires, you need the human judgment of an experienced attorney.

FAQ for When a Commercial Lease is Breached

As a landlord, can I use the tenant’s security deposit for past-due rent?

Yes. In California, a commercial landlord can use the security deposit to cover unpaid rent, repair damages caused by the tenant, and clean the unit after the tenant leaves. However, you must provide the tenant with a written, itemized statement of how you used the deposit within a specific timeframe after they move out.

What is the difference between an assignment and a sublease?

In an assignment, the original tenant transfers their entire interest in the lease to a new tenant. The original tenant is typically no longer responsible under the lease. In a sublease, the original tenant transfers only a portion of their interest to a new subtenant but remains the primary party responsible to the landlord.

As a tenant, can I break my lease if my business is failing?

Generally, no. A commercial lease is a binding contract. Your own financial difficulties do not legally excuse your obligation to pay rent for the entire term of the lease. Some leases may contain a “bailout clause,” but this is rare. You may be able to negotiate an early termination with your landlord, but they are not obligated to agree.

What is a “cure period”?

A cure period is a specific amount of time, often defined in the lease or by statute, that a party has to fix (or “cure”) a breach after receiving a formal notice. For example, the 3-Day Notice to Pay Rent or Quit gives a tenant a three-day cure period to pay the rent before the landlord can proceed with an eviction.

Secure Your Commercial Interests

Your commercial property is too valuable to be left vulnerable to a breach of contract. Whether you are a landlord protecting your investment or a tenant defending your right to operate your business, you need a powerful and strategic advocate in your corner. 

The attorneys at Wade Litigation are ready to fight for you. We serve clients in commercial real estate disputes throughout Los Angeles County from our Redondo Beach office. 

We invite you to schedule a confidential consultation to discuss your case and learn how we can help you enforce your rights and achieve your objectives. 

Call Wade Litigation at (866) 784-2624 or complete our online contact form to connect with our legal team.