Short answer: You're in default. You can owe all the rent left on the lease (sometimes all at once), the landlord's costs to re-rent the space, and legal fees, and you lose your security deposit. If you signed a personal guarantee, the landlord can come after your personal assets. How much you really end up paying depends on three things: your lease's default clause, your state's rules, and whether you negotiate before you leave.
What you could owe: a worked example
Say your business has 30 months left on a lease at $6,000 per month base rent, plus $1,200 per month in CAM and taxes, with a $12,000 security deposit, and you personally guaranteed it.
| Item | Worst case | If the landlord re-rents in 8 months |
|---|---|---|
| Remaining base rent + charges (30 × $7,200) | $216,000 | $57,600 (8 months vacant) |
| Broker commission to re-lease (often ~4-6% of the new lease value) | — | ~$15,000 |
| Landlord's legal fees (if the lease shifts them to you) | $10,000-$25,000 | $5,000-$15,000 |
| Security deposit applied | −$12,000 | −$12,000 |
| Rough exposure | ~$214,000-$229,000 | ~$65,600-$75,600 |
The gap between those columns is mostly about whether the landlord must re-rent the space and credit you for the new tenant's rent. That depends heavily on where the property is.
With an unlimited personal guarantee, the worst-case column is a claim against you personally, not just your LLC. This is why the personal guarantee is the most important clause to limit before you sign. See personal guarantees explained.
Your state matters: the landlord's duty to mitigate
"Mitigation" means the landlord has to make reasonable efforts to re-rent the space, and the new tenant's rent reduces what you owe. States split on whether commercial landlords have this duty:
- Many states require it. A 2015 survey for the defense bar (DRI) counted about 28 states following the modern rule that a landlord must reasonably try to re-rent after a commercial tenant leaves. Colorado extended the duty to commercial leases in a 2023 appellate decision.
- Some states don't. The same survey counted about 15 jurisdictions (including Washington, D.C.) following the older rule with no duty to mitigate. In New York, the Court of Appeals held in Holy Properties v. Kenneth Cole Productions (1995) that a commercial landlord generally has no duty to re-let abandoned premises. Many leases there also say so expressly.
- Your lease can change the answer. A clause waiving mitigation, or setting liquidated damages, may be enforced. Massachusetts upheld a clause requiring a tenant to pay the remaining rent in 2023 (Cummings Properties v. Hines).
Because these rules vary and keep changing, check your state's current law with a local attorney before you decide to leave. Sources: DRI mitigation survey (Gordon Rees), Bean Kinney, Holy Properties opinion (Cornell LII).
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Rent acceleration: all the rent at once?
Many landlord forms let the landlord declare all remaining rent immediately due after a default. Courts in many states enforce acceleration only when the amount is discounted to present value and credited for what the landlord recovers by re-renting; an undiscounted demand for every remaining dollar can be treated as an unenforceable penalty. Read your default section for:
- Acceleration — is it there, and is it discounted and credited for re-letting?
- Cure periods — how long you have after notice to pay before it's a default. Market is 3-10 days for rent and 30 days for other defaults (see market standards).
- Confession of judgment (common in Pennsylvania) — lets the landlord get a judgment without a hearing.
Source: Bean Kinney on enforceable acceleration. Related: default and remedies explained.
Cheaper ways out, from best to worst
- Use an early termination clause if your lease has one. You give notice and pay a defined fee, often a few months of rent plus the landlord's unamortized improvement and commission costs. It's the most predictable exit. Early termination clauses explained
- Negotiate a buyout. Talk to the landlord before you miss a payment. Negotiated surrenders commonly land around 3-6 months of base rent plus unamortized costs, far less than 30 months of rent. Get the release in writing, and make sure it releases any guarantor too.
- Assign or sublet. Finding a replacement tenant often solves the problem for everyone. Check your assignment clause: consent "not unreasonably withheld" is market, while "sole discretion" gives the landlord a veto. Remember that an assignment usually leaves you (and your guarantor) liable unless the landlord releases you. Subletting and assignment
- Use a "good guy" guarantee if you have one. It typically ends your personal liability once you give notice, pay through the surrender date, and hand back the keys.
- Document a landlord breach. If the landlord failed to repair, deliver, or provide promised services, you may have defenses or termination rights. Get legal advice before acting on this.
- Stop paying and walk away. This is usually the most expensive option. It triggers every default remedy and gives up your leverage.
Whatever route you take, don't stop paying first. Your leverage is highest while you are a tenant in good standing. Start the conversation with the landlord early, offer a replacement tenant or a buyout, and put any agreement in a signed surrender or release.
For a step-by-step plan, see how to get out of a commercial lease early.
Before you sign your next lease
The time to limit these costs is before you sign: a capped or burn-off personal guarantee, a reasonable cure period, acceleration only if discounted and credited for re-letting, an assignment clause that lets you sell the business, and ideally an early termination right. Compare your lease against what's normal for small business tenants.
Want to know your exposure before you decide? LeaseLens reviews your lease's default, guarantee, assignment and termination clauses against market standards and calculates your total rent obligation — in minutes, for $75.