Commercial lease in divorce

[borreman]

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

My wife and I are in the process of divorcing. We have an uncontested divorce with no children and all the paperworks were filed out by ourselves.

We have had a business together (50/50) since 2006, and in 2009 we moved location and signed a 5 year commercial lease. Now that we are getting a divorce, the decree states that my wife is receiving this business in its entirety (100%), including all its debts and any current lease or contracts attached to the business.

I thought that would get me protected in case my wife stops paying the lease for whatever reason, but I also asked the landlord for my name to be removed from the lease, and he refused.

So my question is, am I still legally contracted to the commercial lease eventhough the decree states differently? Does the divorce decree supersedes the real estate contract?

Thank you for your help.

 

[HomeGuru]

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

My wife and I are in the process of divorcing. We have an uncontested divorce with no children and all the paperworks were filed out by ourselves.

We have had a business together (50/50) since 2006, and in 2009 we moved location and signed a 5 year commercial lease. Now that we are getting a divorce, the decree states that my wife is receiving this business in its entirety (100%), including all its debts and any current lease or contracts attached to the business.

I thought that would get me protected in case my wife stops paying the lease for whatever reason, but I also asked the landlord for my name to be removed from the lease, and he refused.

So my question is, am I still legally contracted to the commercial lease eventhough the decree states differently? Does the divorce decree supersedes the real estate contract?

Thank you for your help.

**A: the answer is yes; you are still on the lease. The landlord is not a party to your divorce decree.

 

[borreman]

Ok, fair enough for the landlord. But how can my wife make all the money from the business and then if she stops paying, I am responsible for the lease payment. Where is the logic?

How can I prevent that? Is there any documents I can draft with my wife or with the court to prevent this situation to happen?

 

[mistoffolees]

**A: the answer is yes; you are still on the lease. The landlord is not a party to your divorce decree.

That is completely true.

However, if ex fails to pay the lease and the landlord has to come after you, you can sue to force her to pay it. Or, if you have to pay it, you can sue to force her to reimburse you.

 

[HomeGuru]

Ok, fair enough for the landlord. But how can my wife make all the money from the business and then if she stops paying, I am responsible for the lease payment. Where is the logic?

**A: there is no logic to that scenario, but then again you were the one that agreed to it. You did not want to hire an attorney.

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How can I prevent that? Is there any documents I can draft with my wife or with the court to prevent this situation to happen?

**A: maybe you should now hire the attorney that you were supposed to hire before getting into this mess. I hope you did not do the same thing with your home mortgage.

 

[borreman]

**A: maybe you should now hire the attorney that you were supposed to hire before getting into this mess. I hope you did not do the same thing with your home mortgage.

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I appreciate the reply, but that still doesnt explain to me what an attorney would have done to prevent this.

If the landlord is not a party to my divorce decree, how can an attorney change that?

Thank you!

 

[HomeGuru]

**A: maybe you should now hire the attorney that you were supposed to hire before getting into this mess. I hope you did not do the same thing with your home mortgage.

________________________________________________________________

I appreciate the reply, but that still doesnt explain to me what an attorney would have done to prevent this.

If the landlord is not a party to my divorce decree, how can an attorney change that?

Thank you!

**A: for starters, your attorney would have told you not to go the 100% route and put in a condition of the divorce an entire plan for the lease.

 

[borreman]

Ok, so basically you are telling me I should have hired a lawyer back in 2009 and insert a divorce condition in the lease. Sounds good, but that wasnt done.

Now we are in 2011, and beside telling me what I did wrong, you are not telling me how I can be helped now...

So not trying to repeat myself, but is there any documents I can draft with my wife or with the court to get me out of the repayment of the lease until its expiration in 2013?

Btw, my wife has no intention in not paying, but who knows what the future holds...

 

[nextwife]

There is no such thing as removing liabilibity to a third party by divorce decree without the third party agreeing, therefore you need to have some sort of legal agreement, perhaps a reciever appointment, built into your decree to step in the event of any default on the lease, and make certain business profits go to joint business creditors first. You need to have your attorney structure some sort of provision to make certain the business cannot stay in default on the lease yet collect the business profits.

 

[mistoffolees]

There is no such thing as removing liabilibity to a third party by divorce decree without the third party agreeing, therefore you need to have some sort of legal agreement, perhaps a reciever appointment, built into your decree to step in the event of any default on the lease, and make certain business profits go to joint business creditors first. You need to have your attorney structure some sort of provision to make certain the business cannot stay in default on the lease yet collect the business profits.

AND, the next time you set up a business, set it up as a corporation rather than as a proprietorship.

 

[LdiJ]

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

My wife and I are in the process of divorcing. We have an uncontested divorce with no children and all the paperworks were filed out by ourselves.

We have had a business together (50/50) since 2006, and in 2009 we moved location and signed a 5 year commercial lease. Now that we are getting a divorce, the decree states that my wife is receiving this business in its entirety (100%), including all its debts and any current lease or contracts attached to the business.

I thought that would get me protected in case my wife stops paying the lease for whatever reason, but I also asked the landlord for my name to be removed from the lease, and he refused.

So my question is, am I still legally contracted to the commercial lease eventhough the decree states differently? Does the divorce decree supersedes the real estate contract?

Thank you for your help.

Nope, your landlord is not a party to your divorce. Your original lease contract with him stands...no matter what your divorce decree states.

 

[borreman]

Thank you so much for your inputs and advices.

 

[LdiJ]

There is no such thing as removing liabilibity to a third party by divorce decree without the third party agreeing, therefore you need to have some sort of legal agreement, perhaps a reciever appointment, built into your decree to step in the event of any default on the lease, and make certain business profits go to joint business creditors first. You need to have your attorney structure some sort of provision to make certain the business cannot stay in default on the lease yet collect the business profits.

Actually, from first hand experience I can tell you that this won't fly. Its a good idea, but from a practical standpoint it will not work. If she stops paying the rent it will be because the business is not profitable and is failing. In that instance there are other laws that dictate where the business income must go and in what order.

Rent is actually pretty low on the list.

If they have had the business since 2006 its probably doing ok. The OP is probably just going to need to ride it out until the lease expires.