I acquired a commercial lease in February but due to the start-up nature of the business was unable to sustain the rental payments. I wrote a notice to the landlord and asked for a reduction in payments until we secured our finances. He was unwilling to extend that request to us. Subsequently, I lost my job in April and we had to absolve the business. However, we agreed to stay thru May at his request. We moved out on May 31 and still owe May's rent. We were contacted by a lawyer on June 4th. And wrote a request for the landlord to take the final payment and security deposit as release from lease. However, they have imposed an additional 2k as a penalty and lawyer fees of 225. Without working and or having any form of income, I am unable to pay. Would you suggest taking out a small loan and or credit card to cover this balance and washing hands of this? would you contest the additional 2k. would you just make payments... not sure how to proceed. Don't want to lose home/ car/ everything... but afraid that the longer this lingers the more fees they will impose. Currently trying to get unemployment but it does not cover my personal expenses... really in a bind.
Country relating to Question: United States
State (if USA): Maryland
corresponded through the lawyer to ask for landlord to accept just security (2500) and May's rent/cam (3000) but they still want the additional 2k as a fee to break
Thank you for the post, I am happy to assist you by answering your questions. Did you take out the commercial lease in your personal capacity or was it via a separate business entitiy (e.g. LLC, Inc)?
It was under my LLC but they made me sign a personal guarantee
Thank you Kim, in this case you should consider trying to negotiate down the $2000 penalty, claiming that you agreed to incur my liability by staying through the month of May at the landlord's request and therefore it is a form of unjust enrichment to impose a penalty in this instance, but as an attempt to resolve this dispute amicably, you will agree to pay $500 plus the $225 in legal fees. Please let me know if you need additional guidance.
So if I'm able to accomplish this, just find a way to pay right? through credit or Loan? because negotiating doesn't go so well when you have to ask to make payments and/or really don't have the money - I guess that's my real question. and the lawyer mentioned signing release papers... how do I get that done so they can't come back later and hold me to the rest of the lease... or is it even necessary? Do I just send the money or how do I get this really resolved to the point of no future penalty because they keep threatening me owing the full 3 years of the lease.
Yes, but you may be able to negotiate a payment plan after you reach an agreement on the sum to be paid. If no agreement can be reached on a payment plan, you would have to pay with a lump sum, and likely then have to pay via credit or loan. By release papers your attorney was likely referring to a waiver and release agreement whereby the landlord agrees that the payment received is in full satisfaction of any and all claims associated with the tenancy, whether known or unknown. There are sever examples of such online, for your reference here is a sample: http://contracts.onecle.com/hp/capellas.sep.2002.11.11.shtml
I understand. Thank You
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