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Dwayne B.
Dwayne B., Attorney
Category: Landlord-Tenant
Satisfied Customers: 32373
Experience:  Began practicing law in 1992
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This case involves a commercial property in Bergen County,

Customer Question

This case involves a commercial property in Bergen County, NJ. We purchased a business that was established and being run out a rented building. The previous owner and the landlord never assigned the lease over to us. There were other problems with the previous owner where they kept money belonging to us and although that is a separate issue it was the reason it became difficult to keep up with the rent. Although they never assigned the lease over to us and our names were never on the lease the landlord had first hand knowledge that we were the new owners. He knew who I was. There was no doubt. He was a customer of mine every single morning for 14 months and I was first introduced to him as the new owner.
The landlord locked us out due to non payment of rent. The lockout occurred when I was not present. After the lockout myself and my partner asked the landlord to allow us to go inside and get our personal belongings as well as business inventory and equipment belonging to both of the businesses. I had two businesses being run out of the space. One was the retail business (although the previous owner who took payment for business never transferred the business, the business checking account or the lease over to me) and another business - my already established and separate wholesale business. The wholesale business was totally separate and under a different LLC than the LLC that was on the lease. Since we purchased the LLC that owned the retail business being operated out of the space as a deli, bakery, bagel shop we operated and stored my inventory for my wholesale business (baked goods) there as well.
Before the lockout I spoke with the Landlord and explained the situation the previous owners and put me in and why it had become impossible to keep up with the rent payments. The previous owners kept all the money belonging to the corporation by not signing the business corporate checking account over to us and withdrawing the monies that were automatically deposited into the account. They basically stole over $100,000.00. My partner brought this to my attention much later than he should have but suffice it to say my partner was trying to resolve it without upsetting me. He was the accountant of the business. I handled the day to day management of both the retail and wholesale business. It was wrong but he finally informed me when the situation was dire. After I explained the situation to the landlord and advised him I would be suing the previous owners for fraud amongst other things I explained that when I received all the money owed me I would pay him back for the past due rent, but as of now I would pay him two months of advanced rent and wanted to enter into a new lease in our name. Even though he never assigned the lease to us we paid the security deposit to the previous owners and he always accepted our checks for payment of rent. He said he would give me time to get the lawsuit underway before doing anything further. He also agreed not to speak with the previous owners until after I had a chance to seek counsel and get things moving on the criminal case. That was on a Thursday. He locked me out the following Tuesday.
My question is can he just take over my businesses? Can he just take the assets of both of my businesses since he never filed for a lien against the past due amount owed to him against us or the previous owners who are still on the lease? He may have had the right to remove our rights to access the building but does that eliminate my personal and business property rights?
In a matter of 4 weeks he has already rented out the space and allowed the new tenants to basically step into our shoes and run our business. They never paid me for the business, the inventory, the equipment or anything related to the business assets that we own. The new tenants walked right into a fully stocked business with thousands and thousands of dollars worth of inventory for free because the landlord just decided to re -lease the space without due legal process to take possession of our belongings and assets. He never gave us anytime to get the business assets for both of the businesses out of the space. Nor did he entertain the thought of renting the space to me us he should have done from the beginning. All we wanted was a chance to do things the right way. He kept promising my partner and I that he would work something out with us and we should call his attorney to discuss and come up with a proposal but she never responded to our phone calls. The landlord just made empty promises while he knew he was re-leasing the space filled with our belongings. He said if we got the permission of the previous owner (who was on the lease) to enter the premises to get our belongings we could do so. We got the permission and he still refused. He re-leased to new tenants who basically walked in to our established business for free. We were never paid.
Submitted: 5 months ago.
Category: Landlord-Tenant
Customer: replied 5 months ago.
I am sure I have a criminal case against the previous owners I know feel I have a case against the landlord as well.When I found out we were behind in the rent I finally had an opportunity to face the previous owner (he always dealt with my partner and not me). I told him I was going to speak with the landlord and tell him what has been going on. I told him you have our money in the corporate checking account and that he needed to pay the past due rent with that account. He finally agreed and gave the landlord a check from a different account of his and that check bounced. This is what upset the landlord to the point of him locking us out. The landlord should have known he could not keep our belonging or give our business away to new tenants. He had a right to rent his space but not hand my business over to new tenants. I already offered him two months advanced rent plus I told him I would pay him back the past due rent when I recovered the money from the checking account the previous owner should have transferred over to me. I asked for a new lease but he instead leased to a new tenant and gave them all of my property. All of my belongings. My whole business. The retail and the wholesale business. He has caused me to loose so much because of his actions and not following the law.
Expert:  Dwayne B. replied 5 months ago.

Hello and thank you for contacting us. This is Dwayne B. and I’m an expert here and looking forward to assisting you today. If at any point any of my answers aren’t clear please don’t hesitate to ask for clarification. Also, I can only answer the questions you specifically ask and based on the facts that you give so please be sure that you ask the questions you want to ask and provide all necessary facts. Please note: This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

My question is can he just take over my businesses? Can he just take the assets of both of my businesses since he never filed for a lien against the past due amount owed to him against us or the previous owners who are still on the lease?

You have a number of problems. You're asking if he "can" do something that he has obviously already done. The real question is, what you can do about it?

A lease than will be in effect for more than a year, and a lease on real property, must be in writing to be effective and enforceable under a concept of law called the "statute of frauds" (it really has nothing to do with fraud).

This lack of a written contract cuts both ways since he can't claim against you under the terms of a lease this is void.

Without a written lease you are operating under a month to month lease.

Most of the protections that are covered by the law and which you've heard about only cover residential or consumer leases, not commercial leases.

With all that being said you can act to get your property back. You can get a local lawyer who will file a case with the local court and they will order the landlord to turn your property over to you. The question then will be whether he can counter-sue for the lease amounts, I don't think he can, but the judge will definitely order him to turn your property over to you.

Please ask any follow up questions in this thread.

Customer: replied 5 months ago.
He has taken the argument that we were not the tenants so there is no month to month lease with us. He has said he will only deal with the persons on the lease. If that is the case I would have to assume he does not have a right to take the belonging of someone who is not on the lease. He will not acknowledge as as tenants at all. It does say in the lease that the previous owner (who is on the lease) cannot sublet the space. But the landlord knew he sold the business to us and we were actually the persons paying the rent.
Expert:  Dwayne B. replied 5 months ago.

You are correct, and that's why I said that he lack of a lease cuts both ways. If you are not the tenants then he has no reason to keep your property.

If you want to argue this point with him then you can argue that since he was taking the monthly payments from you he is "estopped" from now denying that you were not month to month tenants. However, I think it may work better for you to agree with im that you're not tenants and therefore he has no rights to hold your property.

Usually people can handle evictions and lock out themselves but you are going to need a lawyer since his one involves the issue of whether there is a lease or not and you're going to have to be prepared to argue both ways for the judge.

You should also be able to sue for your attorney's fees.

I don't see any issues with you winning and him being ordered to give you your property back if you retain a lawyer.

If your question has been answered then I'd offer my best wishes to you and ask that you please not forget to leave a Positive Rating so I receive credit for my work.

Of course, please feel free to ask any follow up questions in this thread. I want to be sure that all of your questions are answered. In addition, once you issue your Positive Rating the question will lock open and no longer time out so you can come back to it anytime in the future if you think of any follow ups.

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