Search:

Home | Business

Is A Signed Lease A Valid Binding Contract For All Parties Or Does It Not Hold Water?
Dave Clocker
I got a call from a buddy regarding a lease he had signed up with a tenant. It is a property out of state and he just received some interesting news today.
The tenant has notified him that she cannot handle the lease on the building anymore because her business is not making sufficient income to support the rent. The tenant has given notice to break out of the lease by the next month and this is the lease that was just signed last month. If she had known she has financial problems, then why did she even bother signing the lease renewal? This does not seem to make sense at all and it sounds quite suspicious.
This is a commercial lease for a salon that has a 3 year term on it. All the signatures were on the final draft of the lease renewal. Here is the interesting piece to it. The property manager who is managing the unit indicates that he heard "through the grape vines" that the tenant was looking at another place down the street. However, she probably found it one week too late since she had just signed the lease renewal for 3 more years. It all seemed more to be a case of the tenant wanting to excuse herself from the lease to go elsewhere.
The property manager was notified of the termination of the lease via email. The name of the tenant on the lease is an LLC and not her personal name since she is operating under the business name.
How best should the owner handle this situation? Can they pursue this and get a judgment and go after the tenant personally to recoup the loss damages since she plans on vacating the unit by the end of the next month? What would be the most practical way you would work this out or do you know of someone who has gone through this?
For situations where the tenant has terminated the lease in this fashion, for most valid leases, the tenants are liable for the expenses accrued by the owner during the time period that the building remains vacant. In the meantime, do some investigation and find out the real reason why the tenant has suddenly decided to terminate the lease. Let the tenant know that they can break the lease, but they are responsible for the rent until new tenants are found and start paying rent. Furthermore, since it appears evident that the tenant is set on moving out no matter what the consequences, then immediately begin marketing the property again.
If you are fortunate and have collected security deposit from the tenant at move-in, you can deduct the expenses incurred by the owner from the security deposit. If it gets to the point, then proceed with filing a small claims case or a lawsuit against the tenant to recover the costs of the lost rents. When entering into any contracts, all parties are aware there are strict rules to adhere to and when either party does not live up to their side of the agreement, then there are consequences.

Source: http://easycontentpro.com

To see real estate in a creative light that helps put money in your pocket, read on. Dave Clocker is a real estate investor who will teach you the Secrets That 99% Of The People Will Never Know About How To Almost Magically Build Streams of Income Thru Real Estate. He has taken these creative strategies and combined them into content-packed videos, insider reports, and conversations with experts. Check more out at www.RealEstateWayToWealth.com

"Is A Signed Lease A Valid Binding Contract For All Parties Or Does It Not Hold Water?"
written by Dave Clocker

Not yet Rated

 

Click the XML icon above to receive Business articles via RSS


Other articles you may find interesting:
Sign Up for a free account or learn more.
Member Login
Submission Guidelines
Submit Articles
Most Popular Articles
Top Authors
Ezine Notifications
Article RSS Feeds
About Us
Blog
Link to Us
Contact Us
Privacy Policy
Terms of Service
Article Directory Software
Start your own article directory today - Click here to download the exact software that powers EasyContentPro for FREE!

Powered by Article Dashboard