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Richard
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 47096
Experience:  32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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We are a short term rental agency and we provide accomodation

Customer Question

We are a short term rental agency and we provide accomodation in France. We have a rental agreement with an american owner of a 6 bedrooms apartment in paris. However, the owner just sent us this email:

"Effective immediately (April 30th) do not rent the apartment to anyone else for any period of time and cancel any rental contracts beyond May 14th, 2013. Any rental contracts beyond May 14th will not be honored".

The reason is because the owner sold his apartment without notifying us. We think the sale contract will be signed mid-may/ end of may. Therefore, we have about 8 confirmed rentals coming up from May 25th until end of the year that we need to cancel. The problem is we will not find any alternatives accomodations for the canceled period and clients will be angry against us. We are not responsible for this cancelation and it will create damage to our company. In addition to that, we will have to refund our clients meaning loosing our commissions over those rentals and it will create a loss for us since we have put marketing and other expenses in order to find tenants.
In the rental agreement with the owner it says:

"This contract may be canceled during its term by registered letter, with acknowledgment of delivery, with a 3 month notice minimum in order to allow "the company" to honor reservations in progress. it is understood that all leasing agreements of any kind made by "the company" to the owner before the date and hour of the beginning of the notice will have to be honored without reserve or modifications except by cancellation on the part of the tenant. In the even of termination of this contract without notice or for any reason that prevents the owner from honoring this contract, "the company" reserves the right to apply a penalty of 50% of the expenses of rentals over the period refused in the form of penalties for moral wrong and financial damages due to the termination of the contract. Additionally, "the company" reserves the right to rebill any difference in cost of the tenant resulting from having to move or "upgrade" the tenant due to the lack of other comparable availabilities. Any differential in price to the tenant by "downgrading" for lack of other availabilities will be credited to the account of the tenant".

We have consulted a lawyer in France, but it has been recommended us to start a legal procedure in the USA where the owner is resident. Please let us know what it can be done? There are approximately 100.000 USD rentals cancelation in rentals. You can imagine the damage it will caused for us. We need help to write an official letter to the owner for its reply of contract termination with no possibility to honor the reservations. Please let us know how it will works and price for writting a letter and maybe to start a legal procedure in the USA. Looking forward to hearing from you soon.

Kind regards,
Andy
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Richard replied 1 year ago.
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good afternoon. I can certainly give you direction, but under our terms of service with JustAnswer, we can only provide information. We are not allowed to provided direct representation on your behalf. Please let me know if you would like for me to give you direction. If, on the other hand, you choose not to move forward with JustAnswer due to the foregoing limits, I certainly understand. Thanks.
Customer: replied 1 year ago.

Dear Sir, I understand. Could you please give us direction and maybe giving us leage "keywords" in order to write a reply to this termination of contract? English is not my language and I appreciate any help. Also please let me know what kind of action will be possible for this kind of situation? And what should we say to the tenants that have sent payment in advance in order to cancel? Tenants will probably not accept that.


 


Thank you for your detailed reply.


 


 

Expert:  Richard replied 1 year ago.
Thanks so much for replying. 1) Because you were operating under a contract with the owner to lease the property, your first position will be that he's going to have to sell the property subject to the binding rental agreements in place and that the new owner will have to honor those rentals. Let him know that otherwise, once you file suit against him, you will file a "lis pendens" which is a fancy word for a lien against the property which will let any prospective buyer know that the property is subject to a suit and possible other interests (i.e., these rental agreements) in the property. 2) You will need to file this in his location. Under my terms of service with JustAnswer, I'm not allowed to make a specific recommendation, but I can give you direction. You would want to either contact the state bar association or nearest law school to his location for a referral. I prefer the latter because they take great pride in their graduates and will take a more personal interest in making sure your referral is a good one because it will be a reflection of the school. If he's in DC, I would recommend you contact the law school at Georgetown University. 3) Once you file the suit against him to recover all your damages for breach of contract, which will be your cause of action, you will have the leverage you need to collect your judgment. Once the suit is filed and a judgment awarded, you become a judgment creditor, and if the losing party doesn’t then pay the judgment, you can have the sheriff serve a summons on the losing party for a debtor examination. That forces the losing party to meet the judgment creditor in court and answer questions under oath about the losing party's assets. After that information is obtained, the judgment creditor has the power to garnish wages, attach bank accounts, have the sheriff seize other personal property, and/or place liens on any non-homestead property to satisfy the judgment.



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