Commercial Lease Probs

[Ayrielle]

Do commercial lease rules fall under same as residential?
I am in North Carolina. My sister and I rented a garage/sales lot a year ago March. We signed a 6 month lease. At the end of the lease in Sept '99 the landlord kept promising to renew the lease....when he could "get around to it". We continued to rent on a month to month basis. On April 14,00 A man came to us and wanted us to make him a partner in our business, we didn't like him, we said no and told him to leave the premises. He threatened us with a "takeover", we laughed, and basically blew him off. He said he knew he could prevent us from loosing our lease if we'd reconsider, if not then .."fair warning". We quickly went to landlord and asked him if there were plans to rent to someone else and he replied NO! We then told him we needed a lease to be signed, he said "I'll get back to you when I have more time". On the evening of May 2nd, he phoned and asked me if I wanted another 6 month lease or a year this time, I said I prefer a year but would settle for 6 months ( because of him only wanting to do 6 at a time originally), he said ok and hung up. The next morning on May 3rd he came to our business and said he needed to collect the rent for May before we could sign a new lease, but asked for a copy of orginal to look at in case he needed to make minor changes, I gave him a copy. He left, went to bank, cashed my check for 1700.00 and returned 20 minutes later with a 30 day notice to vacate. He raced out the door and said he had nothing to say. I tried to detain him for an explanation, he refused.
It turned out, he had made an agreement almost a month before to rent the premises to the man who came to us about being made partner. The man is set to move in on June 3rd.
It seems to me, we had a verbal agreement to re-sign the lease, is it binding in NC?

Did he take my money under false pretenses?...do I have recourse? This short notice to relocate a business is financially destryoing me, and been impossible to find another location as yet.(looked vigorously)

I suspect he will not refund my deposit of 1,000.00
He never gave me a notice after moving in of my deposit being placed in an escrow account, does this automatically cause him to be at fault and not entitled to keep any of it?
What will happen to me if I hold over for a bit while still looking for new place? It has not gone to a legal eviction.
Thanks in advance for any advice you have.

------------------
Ayri

 

[Tracey]

I can only come up with a couple arguments.

1. I think the best argument is that his eviction was retaliatory. You were trying to make a "good faith attempt to exercise, secure or enforce any rights existing under a valid lease or rental agreement," namely your agreed right to have your oral lease reduced to writing. Ch. 42-37.1(4). The agreement was the oral agreement to renew the lease for 6 months to 1 year, made many times since Sept. '99. He backed out of the agreement because you refused to take on a business partner who was obviously his friend. The partner even threatened to take your lease away. The owner said that was not a possibility, but was clearly lying.

Landlord agreed to resign a one year (might as well try for the whole year) lease with YOU, not with you and his friend. Refusing to resign the lease because you wouldn't take on a partner may be outrageous enough that evicting you is not allowed.

2. Even if you can't prove that he agreed to sign a year lease, you can argue that he gave you an oral 6 month lease on the same terms as the original written lease. He made the oral lease agreement on May 2. I doubt this will fly, since he had already rented to the other guy. He had no intention of leasing to you, so there was no "meeting of the minds" and no contract. Also, he can argue that there was no lease because you hadn't signed anything yet and your oral agreement was "clearly" contingent on signing a written lease.
Your alternative argument is that YOU thought there was a contract and his intentional misrepresentation shoud be held against him.


Notice was proper - a month to month commercial lease can be terminated on 7 days notice.

He collected May rent and gave you 30 days notice. However, you had to pay that rent no matter what, so he didn't damage you by doing so.

Whether he keeps the deposit is irrelevant to terminating the lease. He can only keep the deposit for damages beyond normal wear and tear. Such damages already exist. He has a right to be compensated for them whether the lease ends in June or next May.
Make sure you know how long he has to send you the refund/statement of charges. If he's even one day late, he can't make any charges and may have to pay you a double or triple refund. Don't mention this - you don't want to tip you hand.

Talk to a landlord tenant attorney and ask if you can sue him now to enforce your 1 year lease. (Wrongful ouster.) This way, the question of whether you get to stay will be settled before your moveout date. You don't want to have to pay holdover fees when another tenant is in the pipe! It is possible that the judge, upon hearing all the crap he's put you through, will construe the oral contracts against him and make him sign a lease right there. You need to get the suit started right away, since time is short.


The landlord tenant acts are located in NC Code, Chapter 42. You can find the entire chapter at your local library.


BTW, since your erzatz partner threatened you with a 'takeover,' there's a good chance he plans to operate the same type of business and will make his business name as close to yours as he can. He might even put up 'Under New Management' signs. I suggest you register your business name with the state and trademark it too. Do both on Tuesday. You can find trademark books in the library. You may also be able to register a state-wide trademark. It's cheaper than a federal TM and will provide some protection until you can register the federal TM.


Good luck & let us know how it goes,
Tracey

------------------
This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.

[This message has been edited by Tracey (edited May 29, 2000).]