legal options for commercial lease with 3 years left

[thewatcher]

What is the name of your state (only U.S. law)? CA

Hello, I am seeking advice on what can be done about a commercial lease with 3+ years left. My folks signed on to a 7 year lease back in 2012. Their health has deteriorated rapidly over the past year, and it looks like they may not be able to run the shop for the remainder of the leasing term. Furthermore, crime has been increasing steadily since signing the lease, and it has lead to 2 assault and battery incidents that caused physical harm to them in the past 18 months (one incident lead to dad being taken to the trauma center). This is in addition to regularly occurring incidents of attempted theft in the store. They cannot handle it anymore, and need a way out. The landlord does not want to negotiate, and is going to pursue any avenue in which he will get the full rent promised in the lease. There's a lot of money on the table, and they feel stuck. Selling the business has failed several times due to high rent, and they feel their primary option is to take legal action. It seems from some research that landlords are heavily favored in court; not to mention the contract seems to cover all his bases. While I am not sure if breaking contract is possible, at the very least I want to pursue any avenues to alleviate the situation. Would anyone here have any advice on what options are available? Right now, the only ideas I have on hand is to find a lawyer to find any breach of contract by the owner, or use historical accounts of criminal activity to have him put security on the premises (aka security guard). Thank you for your time

 

[justalayman]

Nothing you have stated suggests your parents have any basis to unilaterally terminate the lease. If they break the lease the damages the landlord can seek are the amount of the remainder of the lease payments. If the building is re-rented it would act to mitigate the damages and as such would reduce the amount your parents would be liable for. If the building cannot be rented at an amount equal to what your parents pay, your parents would be responsible for the difference between the old and new leases.

 

[LdiJ]

Nothing you have stated suggests your parents have any basis to unilaterally terminate the lease. If they break the lease the damages the landlord can seek are the amount of the remainder of the lease payments. If the building is re-rented it would act to mitigate the damages and as such would reduce the amount your parents would be liable for. If the building cannot be rented at an amount equal to what your parents pay, your parents would be responsible for the difference between the old and new leases.

I agree, but bankruptcy is a reasonable option to explore in a situation like this one. A consult with a bankruptcy attorney is probably in order.

 

[TigerD]

They really need to have the lease reviewed by an attorney. Nobody can offer you any advice without a thorough review of the the facts, the contract, and the applicable state laws.

TD

 

[thewatcher]

Nothing you have stated suggests your parents have any basis to unilaterally terminate the lease. If they break the lease the damages the landlord can seek are the amount of the remainder of the lease payments. If the building is re-rented it would act to mitigate the damages and as such would reduce the amount your parents would be liable for. If the building cannot be rented at an amount equal to what your parents pay, your parents would be responsible for the difference between the old and new leases.

Yea, it seems this is the most probably case. Is there anything they can do to force the owner to provide extra security to deter violent crime in the strip mall at least?

I agree, but bankruptcy is a reasonable option to explore in a situation like this one. A consult with a bankruptcy attorney is probably in order.

I'm not sure if that is reasonable as they have enough equity on their home to cover the exemption and 30+ months of rent. They could certainly move assets, but that wouldn't that raise a red flag when filing?

 

[thewatcher]

They really need to have the lease reviewed by an attorney. Nobody can offer you any advice without a thorough review of the the facts, the contract, and the applicable state laws.

TD

that's true, but my folks will not consider hiring an attorney. i'm here to gather some fodder to convince them. i'm not well versed in law, so i am seeking the help of the community to seek any good leads on the issue. then maybe i can convince them otherwise

 

[justalayman]

Yea, it seems this is the most probably case. Is there anything they can do to force the owner to provide extra security to deter violent crime in the strip mall at least?



I'm not sure if that is reasonable as they have enough equity on their home to cover the exemption and 30+ months of rent. They could certainly move assets, but that wouldn't that raise a red flag when filing?

Hiding assets would raise a red flag and quite possibly cause a bankruptcy filing to be rejected and in some cases can even be considere to be criminal. It's not s smart thing to consider doing.


I cannot see any way the tenants could force the landlord to hire security guards. Your parents are free to hire security guards if they would like security guards on hand.

 

[thewatcher]

Hiding assets would raise a red flag and quite possibly cause a bankruptcy filing to be rejected and in some cases can even be considere to be criminal. It's not s smart thing to consider doing.


I cannot see any way the tenants could force the landlord to hire security guards. Your parents are free to hire security guards if they would like security guards on hand.

that's unfortunate. guards cost money, which they cannot really afford anyways. business is slow...

unrelated...but it sucks that big banks get bailouts, but small businesses can't even get out of a lease.
/end rant

 

[TigerD]

that's true, but my folks will not consider hiring an attorney. i'm here to gather some fodder to convince them. i'm not well versed in law, so i am seeking the help of the community to seek any good leads on the issue. then maybe i can convince them otherwise

It is a commercial lease. Everything depends on what is in the contract. Nothing anybody says can be accurate with reviewing the contract.

Good luck.

TD

 

[quincy]

As TigerD said, your parents really need to have their lease personally reviewed by an attorney in their area. What they can look for in their lease, though, are "indemnification and waiver" clauses. These are common in standard commercial leases. If there are no such provisions, your parents could potentially have options not mentioned here.

But, again, the lease needs to be reviewed to determine if these options are available and realistic.