How a Business Hired a Lawyer to Review an Office Space Lease in California

No Mid-Term Rent Hikes in a Fixed-Term Lease: In Texas, a landlord cannot increase the rent in the middle of a fixed-term office lease unless the lease agreement itself grants that right. A lease is a binding contract for the agreed term—typically one year or multiple years in a commercial setting—and both parties are locked into the agreed rent amount for that term. Texas law (and general contract principles) provides that neither the landlord nor the tenant can unilaterally change lease terms during the lease period without mutual consent. This means that if you have, say, a 3-year office lease at \$X/month, the landlord cannot suddenly demand \$X+100 in the second year unless the contract explicitly allows a mid-term increase. As the Texas State Law Library and tenant advocacy guides note, a written lease lasting a set time means the rent won’t change during that period “unless the lease gives the landlord the right to do so.” Any attempted rent increase not supported by the lease would violate the contract. Lease Agreement Controls Rent Adjustments: It’s crucial to check the lease document for any rent adjustment clauses. Some commercial leases include built-in escalation provisions—for example, an annual increase (e.g. 3% per year), or rent indexed to inflation, or increases in property taxes or operating expenses passed through to the tenant. If the lease contains such a clause, then the landlord can raise the rent according to that agreed formula or schedule, because the tenant consented to those terms when signing. In that case, it’s not a unilateral change but rather executing the contract. However, if the lease is silent on rent increases, the landlord must honor the fixed rent for the entire term. They cannot impose a new rent or add fees during the lease term without the tenant’s agreement. Any change in terms mid-lease requires both parties’ consent (usually documented in a written lease amendment) to be enforceable. No Statutory Rent Control – But Contract Must Be Honored: Texas has no statewide rent control, meaning there’s no law capping how much rent can increase between leases or in a renewal. Landlords are generally free to set or raise rent amounts when a new lease term begins. But this freedom does not allow breaking an existing lease. Even though Texas law doesn’t limit the amount of an increase, it does require that landlords abide by the lease during its term. In effect, the landlord must wait until the current lease expires before charging a higher rent (unless, again, the lease itself built in a mid-term increase). When the term is up, the landlord can propose a higher rent for the renewal or for a new tenant. During the term, the tenant is protected by the contract. In a recent example, a Texas news report highlighted that a landlord’s attempt to add a new fee mid-lease was improper, citing the rule that a lease can’t be changed in the middle of its term without agreement. Both parties are entitled to the benefit of their bargain for the full lease period. Month-to-Month or Short-Term Tenancies: The situation is different if the office space is on a month-to-month lease (which is less common for commercial leases but possible in some flexible office arrangements or holdover situations). In a month-to-month tenancy, the “term” is essentially one rental period at a time. Texas law allows a landlord to increase rent for the next period as long as they give proper advance notice (typically one rental period’s notice). For example, if an office is rented month-to-month, a landlord could notify the tenant that rent will go up starting next month (with at least 30 days’ notice if rent is paid monthly). The tenant then can choose to accept the new rent or terminate the tenancy before the higher rent takes effect. But even in this scenario, the landlord cannot raise the rent instantly or retroactively—any increase can only apply to future rental periods after notice. During any paid-for month, the agreed rent stays in effect. Enforcement and Remedies: If a commercial landlord were to attempt a rent increase mid-lease contrary to the contract, the tenant can refuse to pay the unauthorized increase and point to the lease terms. The landlord cannot legally evict the tenant for non-payment of an unagreed rent hike during the lease term (that would itself be a breach of the lease by the landlord). Section 91.004 of the Texas Property Code even states that if a landlord fails to comply with a lease, the landlord is liable for any resulting damages. In practice, most landlords will abide by the lease or negotiate with the tenant if changes are needed (for example, both might agree to a modest increase or other adjustment in writing). Tenants should keep records of the signed lease and any communications. If a dispute arises, the clear language that “a lease cannot be changed in the middle of the lease term unless both parties agree” will be the guiding rule under Texas law. Conclusion: For a typical commercial office lease in Texas, the rent is locked in for the duration of the lease term. A landlord may not increase rent mid-term unless the lease contract explicitly permits that change. The tenant has the right to rely on the agreed rate through the lease period. Only at the end of the term (or in a month-to-month scenario with proper notice) can the landlord impose a rent increase. In sum, the lease agreement’s terms and Texas contract law protect tenants from surprise rent hikes during the agreed term. Any deviation requires the tenant’s consent or a contractual clause—without that, a mid-term rent increase is not enforceable. Sources: -Trient Partners Ltd. v. Viacom Inc. (5th Cir. 1996)—discussing Texas law on contracts of indefinite duration being terminable at will. -Lazy M Ranch, Ltd. v. TXI Operations, LP**, 978 S.W. 2d 678 (Tex. App.–Austin 1998)—Texas case (cited in Driver Pipeline Co. v. Mustang Pipeline Co.) confirming that a party may terminate a contract only if the other party committed a material breach or repudiation. -Texas Property Code §91.004 – Landlord’s breach of lease liability (landlord liable for damages for failing to comply with lease).

A landlord could agree to terminate the lease if a tenant requests it or can modify a lease to allow for an option for a tenant to vacate the premises at an earlier date. If a tenant wants to vacate the premises on an earlier date than the lease end date, either the landlord would have to agree to the earlier termination date or the tenant could be found in breach of contract. If you are considering early termination, it's advisable to communicate with the landlord to explore possible solutions, such as subleasing, assigning the lease, or negotiating a modification to the lease agreement. Feel free to reach out if you have other questions about this.