Let Tenants Who Can’t Get Bank Loans Terminate Lease

But set clear limits.

Prospective tenants who aren’t fully financed might be reluctant to sign a lease unless and until they know they’ll be able to secure an operating loan. If they can’t get the loan they need, they’ll want the right to terminate the lease. Of course, this leaves the landlord exposed to the risk of losing the transaction after a lease has been fully signed should the tenant exercise the early termination right.