New Business Owner Commercial Lease Serious Issues

[jakeweil1]

What is the name of your state? Texas
Hello,
I recently purchased a preexisting business. Before I purchased the business and went through the lengthy and pricey approval process by the franchisor I required that the commercial landlord approve me for a 5 year lease with set rates. The landlord initially tried to get me to assume the preexisting lease that the old owners of the business had. I refused to do this because there was only a year left on the existing lease and I have to get an expensive remodel done plus I also wanted to know what my lease payments would be for the next 5 years and lock them in. The landlord did approve me and sent me a copy of a new 5 year lease with rent prices on it. I was told by the leasing agency that the landlord would not sign the lease until I closed on the business. I finally closed on the business a month ago. I signed the lease at closing and sent it next day to the leasing agency. Earlier this week I noticed that the landlord had not cashed my checks yet for the lease deposit and the 1st months rent. I called to inquire and was told by the leasing agency that a new landlord was in the process of buying the shopping center and they would not sign the 5 year lease and that at this point all that I have is the 1 year left on the existing lease. They also said that we had not been accepted as tenants yet and the seller of the business was still on the lease for the next year. At no point did the leasing company or the former landlord communicate to me that there was an impending sale that would disallow the landlord from signing the contract that he had sent to us to sign. A couple days before closing I inquired if everything was set to go with the new lease and the leasing agency assured me that everything was fine and I just needed to sign the lease at closing and send to them which I did along with the deposit and the 1st months rent. I have this correspondonce as a saved email and voice message. I probably would not have closed on the business if I did not have a 5 year lease. At this point I feel that the new landlord has to honor the 5 year lease that the old landlord through their leasing agency presented to me and represented that would be honored past the date that I closed on the business. Do I have a legal leg to stand on or am I completly screwed??? Any advice that you can give would be greatly appreciated I am also planning on consulting a lawyer about my legal options.
Thanks,
Jake

 

[JETX]

I probably would not have closed on the business if I did not have a 5 year lease.

Interesting statement, considering you did exactly what you said you 'would not have' done.

[/quote]At this point I feel that the new landlord has to honor the 5 year lease that the old landlord through their leasing agency presented to me and represented that would be honored past the date that I closed on the business. Do I have a legal leg to stand on or am I completly screwed???[/quote]
Your 'feelings' have nothing to do with this. You should NEVER have closed without the SIGNED lease in hand... or at least a written promise of a valid lease.
At this point, you have NO rights to demand or expect anything beyond the current lease.

 

[jakeweil1]

Retort

Evidently having a newly written lease with different terms and prices isn't worth the paper it is written on without a signature from the landlord. I was caught in a serious catch 22 situation. I did not want to sign a lease until I closed because I did not want to be responsible for the lease until I owned the business. The former landlord would not sign the lease until the deal was closed. When I called the leasing agency a day before closing and asked if everything was in working order regarding the lease and he told me yes should they have legally disclosed the impending sale? I realize that without a signed lease my case is weak. DO I have any legal position that in an act of good faith the leasing agent and former landlord should have disclosed the sale and the fact that they could not execute the lease they presented to me? If I don't have a position I will gulp move on and try to renegotiate a new 5 year lease.

 

[JETX]

Evidently having a newly written lease with different terms and prices isn't worth the paper it is written on without a signature from the landlord.

Correct.

DO I have any legal position that in an act of good faith the leasing agent and former landlord should have disclosed the sale and the fact that they could not execute the lease they presented to me?

No.

Bottom line..... for next time. You should have:
1) Gotten the signed lease extension BEFORE you closed, or
2) Gotten a signed lease conditioned on your close, or
2) Negotiated a reduction in price from the seller due to the short lease.

 

[jakeweil1]

ANY Second Opinions??? That the leasing agency represented that the lease was ready to be executed after the new landlord bought the shopping center does not mean anything???

 

[JETX]

ANY Second Opinions???

Yep. You're ugly too!!!

That the leasing agency represented that the lease was ready to be executed after the new landlord bought the shopping center does not mean anything???

Several problems there:
1) The statement by the leasing agent has no legal validity.
2) Can you PROVE that the statement was even made by the leasing agent?
3) Want to bet that the leasing agent will deny ANY statement was made at all... or that you 'misunderstood' what might have been said??

 

[jakeweil1]

Well I have an email and a saved voice mail message from the leasing company agent that says that the lease is ready to be executed. I was told to sign the lease have the seller sign the lease and return the lease to the leasing agency with a check and security deposit which I did. Having a record that the leasing agency told me that everything was good to go with the lease should count for something. Why would the leasing agent ask for a check if I was not approved for the lease??

 

[JETX]

All of your 'why me, why me!!' is a waste of your time and energy. Absent a SIGNED term lease, you have NO lease extension.

 

[jakeweil1]

First off, I dont think I have ever stated "why me". Secondly, the leasing agency states that they won't ever sign a lease until after closing. If they won't sign a lease until I close, and they tell me everything is honkey dorey up until and after closing and they tell me to send money this seems to constitute unfair trade practices and bad faith, No? If this is common practice to wait until after closing for the leasing agency to sign the lease and than not honor the lease that they have agreed to tenants would always get gouged. By the way Jetx are you a lawyer? If there is anyone else with real estate law experience that could weigh in this would be greatly appreciated.

 

[JETX]

they tell me everything is honkey dorey up until and after closing and they tell me to send money this seems to constitute unfair trade practices and bad faith, No?

No.

If this is common practice to wait until after closing for the leasing agency to sign the lease and than not honor the lease that they have agreed to tenants would always get gouged.

No, it is NOT common practice.... as most buyers of a business PROTECT themselves in a 'short lease' situation... usually with the methods noted in my previous post.

 

[jakeweil1]

Bad Advice

Alright Jetx, well lucky for me I did not take your advice at face value. It turns out you don't know your stuff to well. Maybe you should consider not posting answers when you have no clue what you are talking about. Perhaps you were right that most business buyers have a signed lease or a signed promise of a lease prior to closing. However, this by no means denies the fact that the leasing company acted fraudulently. I have spent the last 2 days contacting 15 plus board certified real estate lawyers in Texas. Every single one of them maintains that the leasing company acted fraudulently and that I have legal recourse against them. All of the lawyers I spoke to state that my recorded and written evidence that the leasing agent did not disclose the impending sale to me or the former owners when they were specifically asked was fraudulent. I will file an affidavit tomorrow. It turns out that the leasing agency had a legal responsibility to act honestly and by openly lying they are liable. Even in the worst case scenario that the leasing agency did not know of the impending sale they are still guilty. Ignorance is no excuse since they were empowered to legally represent the landlord. I hope your thousands of other posts were more accurate than the advice you gave me.

 

[JETX]

I have spent the last 2 days contacting 15 plus board certified real estate lawyers in Texas.

Another stupid and unsupportable claim by the anonymous!!
Hell, I talked with 45 Real Property law PROFESSORS and they said you have NO case.

Every single one of them maintains that the leasing company acted fraudulently and that I have legal recourse against them.

Great. Be sure to post a link to your case filing.

All of the lawyers I spoke to state that my recorded and written evidence that the leasing agent did not disclose the impending sale to me or the former owners when they were specifically asked was fraudulent.

See, there you go lying again. There is NO WAY that any attorney will tell you that... without looking at YOUR "recorded and written evidence" and then talking with the leasing agent to verify that they knew, or should have known, of the pending sale. You're full of crap.

I will file an affidavit tomorrow. It turns out that the leasing agency had a legal responsibility to act honestly and by openly lying they are liable.

ROTFLMAO!!! "File an affidavit" with who??? Absent a lawsuit, there is NO ONE to file an affidavit with!! Now, if you had said that you were going to draft and sign an affidavit of facts, I might have believed you.... but you are clearly lying through your ass.

 

[Gadfly]

Can you show that the agent knew about the sale?

My wife was in a building that the owner had for 15-years and had no intention of selling. She saw him one day, then two days later he came in to tell her that he had been made an all cash offer for the building that was too good to pass up. (I saw the numbers. . .dream deal!). He closed for cash the next day.

Can you show that the owner planned to sell?

What you need to do now is make a deal with the owner and adjust you business plan accordingly.

 

[jakeweil1]

First off. I read the email correspondences and relayed the voice mail to the various lawyers I spoke to. It turns out when the leasing agent writes "that all I need to do is send in the signed lease with a check and they will execute the lease" this serves as proof that they represented that the lease was good to go. Duh! Think of one scenario where asking for a signed lease and a check for 1st months rent and the security deposit implies anything other than the landlord has every intention of executing the lease. The leasing agency represents the landlord so they should not have legally represented that the landlord was ready to sign without consulting their client. 45 real estate professors? This number sounds a little high. Either you have way to much time on your hands or you are full of sh*t. Where do you go to law school? Phoenix online University. There is not any law school in the country that has 45 real estate professors. As for the affadavit I'm not sure of the type I'll get the exact wording tomorrow. What I do know is that the affadavit will be filed with the court as a first step towards litigation and that it will cloud the title of the property. This is an acceptable legal action since the leasing agency acted fraudulently and I am legally entitled to claim damages. As far as the leasing agency knowing or should of regarding the sale I forgot to mention a key piece of information that the attorney I hired discovered. The landlord is an LLC and the partners of the LLC also own the leasing company. You seem pretty ****y JetX. From what I can tell you have some grasp on the law but it seems limited. I guess thats why your a law student and not making $200+ an hour. As for your advice I guess I got what I paid for. Nothing!!!

 

[jakeweil1]

Gadfly- Yes I can prove that the leasing agency knew about the sale. I can prove that the leasing company and the property are owned by the same partners. I know that a couple of the store owners in the shopping center that I have talked to told me that they were notified of the upcoming sale by the grounds keeper that is employed by the leasing company. If the grounds keeper knew and was telling store owners this was not exactly confidental information and the leasing agents whose job it is to legally represent the landlord should have been informed.