Key Takeaways

  • A well-drafted lease default clause ensures landlords can enforce lease obligations and pursue remedies, including eviction and compensation.
  • Lease default clauses should define events of default clearly and outline notice and cure periods.
  • Standard lease forms often lack sufficient protection and should be customized with the help of a lease default provisions attorney.
  • Remedies in lease default clauses can include rent acceleration, cost reimbursement, attorney fees, and injunctive relief.
  • Without a strong default clause, landlords risk delays, unpaid rent, or prolonged litigation.

A default clause is a provision in a legal contract that states what will happen if either party in a contract defaults or fails to hold up their end of the agreement. These clauses can be found in any type of contract including loan agreements, lease agreements, and property agreements.

What Is a Default Clause in Lease Agreements?

In a commercial lease agreement, you'll need to include a default clause that will effectively allow the landlord to require their tenants to comply with all of the requirements of the agreement. Usually, a default clause in a lease agreement provides an explanation for how to carry out an eviction in the event that the tenant defaults on their obligations or violates a rule of the agreement.

Default clauses can also provide requirements for a tenant to make payments to cover any unpaid rent or damages to the property. These can require the defaulting party to cover any costs of alterations or subleasing. Fines for violations of legal regulations should also be covered in the default clause of a lease agreement.

Common Events of Default in Commercial Leases

In commercial lease agreements, default clauses often identify specific tenant actions—or inactions—that constitute a breach. Common events of default include:

  • Failure to pay rent or additional charges on time
  • Unauthorized assignment, subletting, or use of the premises
  • Violating lease conditions or building rules
  • Abandonment or vacancy of the property
  • Bankruptcy filings or insolvency
  • Failure to maintain required insurance

Clearly defining these events helps ensure landlords have grounds for enforcing remedies if a breach occurs. Working with a lease default provisions attorney ensures these terms are tailored to the specific lease context and legal jurisdiction​.

Default Clause Objective

The main purpose of a default clause is to give a tenant incentive to hold up their end of the agreement and follow any requirements laid out in the lease. If a tenant understands that they could be evicted or required to pay for damages, they will likely be more careful to uphold the lease agreement.

In most states, commercial tenants have a lot of power through the court system and can use it to manipulate or delay a landlord or their property. Landlords will benefit from finding a lawyer to help them draft an effective default clause to avoid such delays and manipulations. This can help avoid any issues with the expiration of the lease. Sometimes, tenants will refuse to leave by the date agreed upon in the contract. A default clause can prevent this.

The primary objective of a lease agreement default clause is to provide the landlord with the legal means to:

  • Hold tenants responsible for any breaches of agreement.
  • Get an eviction judgment when needed.
  • Minimize their losses in the case of a breach.

How a Lease Default Provisions Attorney Can Help

A lease default provisions attorney plays a vital role in drafting clauses that are enforceable and protective of the landlord's interests. These professionals:

  • Ensure the lease clearly defines what constitutes default
  • Establish appropriate notice and cure periods for tenants
  • Include remedies that comply with state and local laws
  • Protect against tenant defenses and procedural delays
  • Customize clauses beyond standard lease templates to close potential legal loopholes

Because tenants often exploit poorly drafted clauses to delay eviction or withhold payment, legal review is critical. Attorneys can also help enforce these provisions through litigation or negotiated resolutions​​.

Consequences of a Poorly Written Default Clause

If a default clause is poorly drafted, a landlord and tenant could end up stuck in court for years debating over or litigating a case. Ineffective default clauses prevent a landlord from being able to get a defaulting tenant out of their property and finding a tenant who will uphold their agreement. Weak default clauses can allow a tenant to take advantage of their landlords by living in a property without staying up to date on rent or taking proper care of the property.

Important Lease Terms

When an attorney negotiates the terms of a lease contract, they should be sure to include the following types of provisions:

  • Termination of the lease due to lack of rent payments
  • Acceleration of rent payments in the event of default payments
  • Deeming any money due other than rent as additional rent that can, therefore, be subject to a nonpayment summary proceeding in court

Lease Remedies Available for Landlord Protection

An effective lease default clause goes beyond defining a default—it should also describe the remedies available to the landlord when a default occurs. Common remedies include:

  • Rent Acceleration: All future rent payments become immediately due.
  • Recovery of Legal Fees: Reimbursement of attorney’s fees and court costs.
  • Possession and Eviction: Right to regain possession of the premises promptly.
  • Injunctive Relief: Prevent the tenant from continuing a violation.
  • Reletting Rights: Permission to enter and relet the property on the tenant's behalf.
  • Damages for Loss of Future Profits: Compensation for lost rental income or repairs.

When landlords work with experienced lease default provisions attorneys, they can ensure these remedies are enforceable and aligned with their goals​​.

What Is a Termination for Default Clause?

In the case of a material breach of the obligations of a contract, the non-breaching party has the option to terminate the agreement. This is done by drafting a written notice of the contract termination that specifies the breaching actions of the other party. A default clause may be subject to what's called a right to cure. This means that the breaching party has a right to defend their actions.

The right to cure in contract law provides a 20 day period from the date that the termination notice was drafted. If the breaching party can basically make right on their actions that went against the terms of the original contract, then the contract will not be terminated.

The breaching party will also be given a notice of their breach of contract. They have 60 days after this notice to cure their breach. If the breaching party doesn't cure their breach within the time allowed, the injured party has the right to terminate the contract immediately with a notice to the breaching party.

Notice and Cure Period Requirements

Most commercial lease default clauses include a notice and cure period, giving tenants a window of time to correct their breach before further legal action is taken. A standard clause may include:

  • Notice of Default: The landlord must notify the tenant in writing, specifying the breach.
  • Cure Period: The tenant typically has 5 to 30 days to remedy the default, depending on the breach type.
  • Failure to Cure: If the tenant fails to resolve the issue within the cure period, the landlord can terminate the lease or pursue other remedies.

Attorneys ensure these timelines comply with local laws and minimize ambiguity. Without clear notice and cure terms, landlords may face delays or legal challenges to their enforcement efforts​.

Frequently Asked Questions

  • What is considered a default under a commercial lease?
    Defaults typically include nonpayment of rent, violating lease terms, unauthorized use, or failure to maintain insurance.
  • How can a lease default provisions attorney help landlords?
    They draft enforceable clauses, ensure compliance with local laws, and help landlords protect their rights during tenant breaches.
  • What is a cure period in a lease?
    A cure period is a timeframe (usually 5–30 days) given to tenants to correct a lease violation after receiving notice of default.
  • Can a landlord terminate a lease without a default clause?
    Without a specific clause, termination becomes more complicated and might require court intervention or be limited by local landlord-tenant laws.
  • What remedies are typically included in a default clause?
    Remedies may include eviction, rent acceleration, recovery of damages, legal fees, and injunctive relief to stop ongoing breaches.

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