Every commercial lease defines what constitutes a default and what remedies the landlord has when one occurs. These provisions are easy to overlook during negotiation — most tenants don’t plan to default — but they define exactly how much room for error a tenant has if a payment is missed or a term is inadvertently breached.
Monetary vs. Non-Monetary Default
- Monetary default — failure to pay rent or other amounts due under the lease
- Non-monetary default — failure to comply with any other lease obligation (maintaining insurance, operating during required hours, unauthorized alterations, unauthorized assignment)
Leases often treat these differently, with monetary defaults sometimes subject to shorter cure periods than non-monetary ones.
What a Cure Period Provides
A cure period is the window of time a tenant has to fix a default after receiving notice, before the landlord can pursue remedies like termination or eviction. Cure periods for monetary defaults commonly range from 3 to 10 days after written notice; non-monetary defaults often receive longer periods (commonly 30 days), sometimes with an extension if the tenant is diligently working to cure a default that can’t reasonably be fixed within the initial window.
Notice Requirements Matter as Much as the Cure Period Itself
Some leases require the landlord to provide written notice before the cure period even begins running; others allow the cure period to start automatically upon the default occurring, without any notice requirement. A lease without a notice requirement is significantly more dangerous for tenants — a default (and the cure clock) can be running without the tenant even being aware of it.
Landlord Remedies Upon an Uncured Default
If a default isn’t cured within the applicable period, leases typically grant landlords several potential remedies, which may be available cumulatively rather than as alternatives:
- Termination of the lease
- Eviction proceedings
- Acceleration of rent — demanding the entire remaining rent for the balance of the term, in a lump sum
- Right to cure the default themselves and charge the tenant the cost
- Pursuit of the tenant’s personal guaranty, if one was signed
Negotiating More Favorable Default Terms
Tenants can and should negotiate default provisions rather than accepting a landlord’s standard form as-is:
- Requiring written notice before any cure period begins
- Extending cure periods, particularly for non-monetary defaults
- Limiting or eliminating rent acceleration as an available remedy
- Requiring a landlord to mitigate damages (attempt to re-lease the space) rather than simply pursuing the full remaining rent from a defaulting tenant
Cross-Default Provisions
Tenants with multiple locations from the same landlord, or tenants who are also franchisees, should watch for cross-default language — provisions that treat a default under one agreement (a different lease, or the franchise agreement itself) as an automatic default under this one as well, even if this specific lease is being fully performed.
Reviewing default and cure provisions in a commercial lease? Brent A. Levison, P.A. helps tenants negotiate fair, reasonable default terms before signing. Contact the firm today for a consultation.
The information in this article is provided for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified attorney.