Rent Acceleration Clauses

What is a rent acceleration clause?

Do you have a rent acceleration clause in your present lease? A commercial  real estate lease acceleration clause in Texas would be a clause in which a landlord can accelerate the payment of rents when a tenant breaches a lease.  The challenge is , not all rent acceleration clauses are created equal. Furthermore,  rent acceleration clauses in Texas are often highly regulated or limited. It all depends upon the state where the leased properties are located. Some states, by law allow for a landlord to implement rent acceleration clauses upon the tenant’s default and others may simply leave it up to the parties to agree or not.

 

Acceleration Clauses in TexasAcceleration clauses

The accelerated rent clause  will state that all rent becomes immediately due and payable upon the tenant’s breach. Theoretically this means if you break or breach the lease, the landlord can sue the tenant for all rent (hence rent acceleration) that is due for the remainder of the lease term that the tenant has not fulfilled.

These rent acceleration clauses are unenforceable. In Texas, landlords are responsible for mitigating damages and exposure to leases with tenants. This means that if a tenant terminates the lease early, the landlord must take reasonable steps to re-lease the subject property.  The landlord is only entitled to recover  lease  payments from the tenant if the landlord attempts to re-lease the property and is unable to do so. It is impossible to determine the amount of time for the landlord to re-let the commercial property space. Therefore, a rent acceleration clause can’t really be  utilized and all that can be done is the landlord can ask the tenant who has breached the lease for rent payments that are current due versus rent acceleration.