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How binding are "verbal" agreements when it comes to business leases in commercial space? - Not very, if the lease is for a year or more:
§ 11-2. When written evidence required to maintain action.
Unless a promise, contract, agreement, representation, assurance, or ratification, or some memorandum or note thereof, is in writing and signed by the party to be charged or his agent, no action shall be brought in any of the following cases:
1. To charge any person upon or by reason of a representation or assurance concerning the character, conduct, credit, ability, trade, or dealings of another, to the intent or purpose that such other may obtain thereby, credit, money, or goods;
2. To charge any person upon a promise made after attaining the age of majority, to pay a debt contracted during infancy, or upon a ratification after attaining the age of majority, of a promise or simple contract made during infancy;
3. To charge a personal representative upon a promise to answer any debt or damages out of his own estate;
4. To charge any person upon a promise to answer for the debt, default, or misdoings of another;
5. Upon any agreement made upon consideration of marriage;
6. Upon any contract for the sale of real estate, or for the lease thereof for more than a year;
7. Upon any agreement or contract for services to be performed in the sale of real estate by a party defined in § 54.1-2100or § 54.1-2101;
8. Upon any agreement that is not to be performed within a year; or
9. Upon any agreement or promise to lend money or extend credit in an aggregate amount of $25,000 or more.
The consideration need not be set forth or expressed in the writing, and it may be proved (where a consideration is necessary) by other evidence.
(that's Virginia code section 11-2, also known as the "statute of frauds", which says that certain contracts are unenforceable).
Can the landlord file suit against my company for being in default if he agreed to accept the lower rent? - The lower rent acceptance is in exchange for the financial documents. Just as he would not be able to compel your documentation, you couldn't hold the lower rent against him. If there's a prior written lease that is still in effect, that would govern this situation. If the lease term expired, then you would be on a "month to month" lease, and what you agree to in terms of rent on that monthly basis can be held against him, but only for a month. He could raise rent by 100% if he wanted to, effective next month.
So while he couldn't hold you to a lease of more than a year, you wouldn't be able to hold him to those terms that were in exchange for your agreeing to give financial documents.
Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, XXXXX XXXXX luck to you!
i'm a bit confused...our lease is a 5 year lease. does that mean a written agreement is required in order for anything other than the lease to be legally binding?
Generally speaking, yes. That is, if you already have a 5 year lease, and it has not expired, then you would need something in writing to change the terms of that lease. Agreements that go beyond the scope of the written lease may be binding (that is, if the written lease doesn't contemplate, say, signage, you could have an oral agreement that governs that situation). But if there are contradictory terms, the written one will almost always apply and govern. You'll need another written agreement that modifies those terms, signed by the "party to be charged" (meaning that you will want him to sign it if you want to enforce it against him)
Generally speaking, then, how difficult would it be (in legal terms) to null the current lease and renegotiate a new one for the remainder of our term?
That depends on whether he would be willing to or not. That requires consent by both parties. If it's consensual, then you can certainly do it without any difficulty at all.
Right - ok, one last question?
All it requires is both parties saying that's the case, and getting it in writting.
Let's say he won't renegotiate the lease in writing and decides to kick us out of the space...I did sign a personal guarantee, but I literally have nothing to my name other than the business itself (which is barely profitable) and my car lease (no house, income, etc.).
Would he really have any recourse?
No. If you don't have a lot of assets, you would be what we lawyers call "judgment proof". That means that taking you to court would cost more than would likely be recovered, so it would not be rational to take you to court in the first place.
Ok, that's what I needed to know. Would I have to pay court fees or anything of the sort if he does decide to file suit?
or would the court just throw out the case?
Not based upon the ability to collect. You could sue a homeless person for a million dollars, and get a judgment, if your case is valid. You might not be able to collect on it, but the court doesn't consider the assets of the individual in deciding whether to throw out a case (which is based upon the validity of the case itself)
oh so I would have a judgement filed against me on my credit report ?
If it got to that point, yes, it would be possible that it would show up on the credit report. But a creditor considers recovery of the judgment in whether to file in the first place.
I see. Thank you.
My pleasure.If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, XXXXX XXXXX good luck to you!
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