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P. Simmons
P. Simmons, Lawyer
Category: Real Estate Law
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Experience:  12+ yrs. of experience including real estate law.
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Hi, We are in SC and our landlord just gave us a Magistrates

Resolved Question:

Hi,

We are in SC and our landlord just gave us a Magistrates letter to move out or pay rent we owe within 10 days. We unfortunately can not do this so what is our options.

-We have 18 months to run on our lease still?
-We pay $2250 per month. Last month I paid none but spoke to the landlord about paying by the end of July as we had hoped this would be a possibility. We paid $1000 a week ago but at current we are in essence 1 1/2 months behind. We wanted to stay however the landlord has said no payment plan as he feels he has done that and he is not a bank.
-He has said to move out before the date given or they will evict. On this 2 questions?
1. If we move out I understand we will be liable for the rent we owe and I am sure he will sue us for the remainder of the lease agreement arguing that they need some one in there etc. Will this effect our credit?
2. Also we had a sublease clause in the agreement. Is it worth our while advertising and trying to find a replacement tenant. Also if not, I have read that the landlord is required to release the building and make every attempt to. If he does and the rate is less than we would have paid I understand we are required to make up the difference. Is this true?

Please feel free to give me any advice you can. This is for a LLC. We are having cash flow issues at the moment as June-August are our dead months but will be trading and have cash flow rectified from then on out.

Thanks for your help!
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  P. Simmons replied 1 year ago.
Thanks for the chance to help. I am an attorney with over 12 years experience. Hopefully I can help you with your legal question.

You mention this is an LLC...is this a commercial property you are renting?
Customer: replied 1 year ago.

Yes it is

Expert:  P. Simmons replied 1 year ago.
Thank you

The rules for commercial leases (and the eviction process) are quite a bit different than for a residential lease

Give me a few minutes and I will type up some thoughts...
Expert:  P. Simmons replied 1 year ago.
Let me start by addressing your two questions

1. If we move out I understand we will be liable for the rent we owe and I am sure he will sue us for the remainder of the lease agreement arguing that they need some one in there etc. Will this effect our credit?

It could. Particularly if they receive a judgment (a judgment is what happens when someone sues you and wins...the court issues a judgment or order to pay). Judgments do impact a credit score.

Now...there are certainly ways to avoid a judgement. The most effective is to negotiate a settlement and avoid court. Court (going to court) is expensive and time consuming...and there is always the element of risk associated with a court case (since you never can be certain what will happen at court). Even small claims court, where the costs are nominal (since you can act as your own lawyer) takes time and has that element of risk.

So it may be you can negotiate a settlement with the landlord to avoid court. This would avoid a judgment and protect your credit.






2. Also we had a sublease clause in the agreement. Is it worth our while advertising and trying to find a replacement tenant.

Yes...though you are at a disadvantage...since you are, in effect, starting off at a loss. In order to sublease, you need to come up with that money you owe up front. You must satisfy that 10 day letter or they will evict (or...they can evict...it may be you can negotiate this away...but at 10 days if you have not paid the entire demand, they can, by law, evict).

That said, if you can find a way to get the subtenant to pa the money you need to make the payment? Then you can avid breaching the lease.

Now...understand, you are ultimately responsible for the rent...so if 2 months from now the subtenant has problems and stops paying, you could be back to square one...but if you can find a reliable subtenant to take this lease on, that can be a way to avoid liability





Also if not, I have read that the landlord is required to release the building and make every attempt to. If he does and the rate is less than we would have paid I understand we are required to make up the difference. Is this true?


Yes. That is called mitigating damages. That is required by law in all states (except NY)...so it will apply in SC. Practically speaking this happens automatically in most cases...the landlord wants the cash flow to continue....so they will advertise to relet the place. So normally this is not an issue. If they rent out within 1 month and can rent out for the remainder of your lease, that would limit the damages you have to pay.

But if they have a tough time renting, that could increase the money you have to pay.






Please feel free to give me any advice you can. This is for a LLC. We are having cash flow issues at the moment as June-August are our dead months but will be trading and have cash flow rectified from then on out.


Negotiation is the key here...if you can negotiate a settlement you reduce uncertainty for BOTH you and the landlord.

If you can not make the payment and the landlord evicts, I would keep up the dialog and try and negotiate a settlement...it may be you can limit your losses this way.

And if you can find the money? Somehow? So long as you pay on time, you can keep your original lease intact.


Please let me know if you have more questions...happy to assist if I can

Customer: replied 1 year ago.

So in response to the second answer. If we move out before the eviction is forced and the release the building in 4 months time for the same amount we pay now are we liable for the remaining months on the lease or just the difference between now and the time it is leased to someone else?

Expert:  P. Simmons replied 1 year ago.
You are on the hook for the lease amount UNLESS you can negotiate an end to the lease

So, for example, if you move out and the landlord rents it the same day to someone else for the same amount? You owe nothing more (than you already d0)

But if they rent out day one (the day you leave), and the new tenant only lasts 1 month and leaves? And they can not find another? You are on the hook for the rest of the lease.

I stress negotiating an end to the lease...that would be key here...if you can negotiate a payment, make sure it ends the lease. Say, for example, you get them to agree for you to pay ___$ to "make it right"...ensure this agreement includes that you are no longer responsible for the lease.

Customer: replied 1 year ago.

Ok so for my understand:


 


If we move out the day before the eviction, we would be liable only for monthly rent after the fact if:


-The landlord has no tennant


-The landlord rents at a lower amount


-The new tennant moves out etc before the lease term we agreed expires?


 


If they rent it out say November first for $2250 per month am I correct in thinking from you info above the follwoing:


 


We would owe :


June $2250


July $1250


Augusta $2250


September $2250


October $2250


 


Total $10250


 


And that would be all as long as the new tennant stayed throughtout the term I was agreed too?


 


Also you mentioned "make it right" any thoughts on this offer?

Expert:  P. Simmons replied 1 year ago.
Your numbers are spot on. Basically, you are responsible for any money the landlords stands to loose by your breaking the lease.

As for negotiating an offer? That is a tough one...negotiating is an art...not a science. You want to work to try and get the landlord to "meet you in the middle". So many things go into negotiations....way beyond the scope of this forum to try and teach it.

But I can say that keeping an "open and honest" dialog with the landlord can help. Empathy is key to negotiations...you want to work with him as a fellow human and try and solve this problem. Be open about your circumstances, and honest in all communications. They try and negotiate the best possible result.

Customer: replied 1 year ago.

Thanks! I appreciate you advice.


 


Cheers


 

Expert:  P. Simmons replied 1 year ago.
yes sir

Best of luck in this fight
Phil
P. Simmons, Lawyer
Category: Real Estate Law
Satisfied Customers: 26823
Experience: 12+ yrs. of experience including real estate law.
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