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Attorney2020
Attorney2020, Attorney
Category: Business Law
Satisfied Customers: 2578
Experience:  I am a practicing attorney. I have experience in business law, bankruptcy, real estate law and estates.
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I am in the 3rd year of a 5 year lease small store within a

Customer Question

Hello, I am in the 3rd year of a 5 year lease for a small store within a hotel property that has performed poorly for a variety of reasons. The store is being running at a significant loss and I am having to finance it from other sources. It feels suicidal to continue but I am not sure what my options are and realize these depend to a very large extent of the lease terms. There is no exit clause per se. If I dissolve the company at the end of this fiscal year what are my likely liabilities?
Submitted: 1 year ago.
Category: Business Law
Expert:  Attorney2020 replied 1 year ago.

The maximum liability exposure is the remaining rental payments to the en of the lease term (2 years of rental payments). However it is unlikely that you would be required to pay 2 years worth of rent because once you breach the lease and vacate premises, the landlord has a duty to mitigate any damages meaning find another tenant which could happen within 6 months of the date you vacate. Under that circumstance, you would only be required to pay for the amount of time the premises was not leased and any difference in the amount that the premises is being leased out compared to the amount you were paying. Additionally, if you dissolve the company, the landlord would only be able to sue the company for the payments assuming you did not personally guarantee the lease. Under that circumstance, the landlord would be unlikely to sue the company knowing that it is dissolved and likely has no cash assets whatsoever.

I hope that helped. Please ask any follow-up questions. Please rate my answer so that I may be credited for my time. I thank you in advance for your cooperation. Thank you.

Expert:  Attorney2020 replied 1 year ago.

I hope that helped. Please ask any follow-up questions. Please rate my answer so that I may be credited for my time. I thank you in advance for your cooperation. Thank you.

Expert:  Attorney2020 replied 1 year ago.

Please rate my answer so that I can be credited for my time. I thank you in advance for your cooperation. Thank you.

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