All too frequently, a commercial tenant will abandon its leased premises prior to the expiration of the lease term. When this happens, the landlord has four primary options.
One of the most common questions our landlord-clients ask us is whether they can recover future rent due following the tenant’s abandonment. The answer is yes, and landlord’s have two primary methods for doing so.
Rent Acceleration Clauses:
Commercial lease agreements often contain rent acceleration clauses, which allow the landlord to collect future rent due at the time the tenant defaults on the lease. Georgia courts treat these clauses as liquidated damages, and they are generally enforceable, assuming they satisfy the three-part test articulated in Southeastern Land Fund, Inc. v. Real Estate World, Inc., 237 Ga. 227 (1976):
The key to this three-part assessment is the reasonableness of the acceleration clause. Thus, a provision that reduced the accelerated rent due to present value and deducted from that amount the reasonable rental value of the premises at the time of the breach would be more likely to be enforced than a provision that failed to account for such considerations.
Georgia landlord/tenant law is complicated. Please do not hesitate to contact our firm if you have a question or are interested in representation. We are here to help.