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Loren
Loren, Lawyer
Category: Real Estate Law
Satisfied Customers: 29031
Experience:  30 years of real estate practice experience.
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Two business owners made a written agreement regarding

Customer Question

Two business owners made a written agreement regarding amount paid towards buildings utilites (landlord refused to have separate meters installed when thus an agreement between the two business) and part of the agreement was one the major user of the utilities was responsible for the billing account. If one of those parties end thier lease early (the one whos name was on the account)and the building owner allow a new business to take over and sign a new lease. Being that the new business purchased all of the business equipment from, runs the same operation, and possibly has some type of "silent purchase agreement" with the prior business and no negotiations were discussed by the ioutgoing or incoming business owners regarding the agreement with the business still operating. The landlord allowed them to move-in without having the matter settled first. The question becomes,
1) Isn't the new business obligated to the same conditions of the original agreement?
2) Can they demand thier own conditions of an agreement because the landlord allowed them to have utilities in thier name?
3) Hasn't the landlord become part of the contract by agreeing to the terms of the original agreement between the first parties and should have made sure the new tenants had made agreeable terms of a new contract prior to taking occupancy and control of the buildings utilities?
4) Even though the new tenants presented a purposal to exsisting business those terms are completely unacceptable, but the exsisting tenant intends to make payment to the utilites account as they had been doing in the past.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Loren replied 1 year ago.

Good morning. I am Loren, a licensed attorney, and I look forward to assisting you.

Expert:  Loren replied 1 year ago.

Before I answer some additional details would be helpful please.

Expert:  Loren replied 1 year ago.

Was the agreement made a part of the lease? Did the new owner purchase the actual obligation and liabilities of the business or just its assets?

Expert:  Loren replied 1 year ago.

Are you online with me?

Customer: replied 1 year ago.
At the time the agreement was signed the business that just left was sub-leasing under the business that is still there. Independent leases were initaiated about 15days later. Discusions with landlord were held due to issues that occured by the now gone tenant to become an addendum but landlord never completed that action.
The answer to your 2nd question.
There are alot of unkown and probably "silent" agreements between the purchaser, seller and likely also with landlord for them to get the other part of building..indicators are there that there is some kind of arrangements for debt assumtion but unknown for sure but for sure all equipment is still in the building just as it was.
Expert:  Loren replied 1 year ago.

Thank you for the additional information.

Expert:  Loren replied 1 year ago.

I am sorry to hear of your dilemma. I realize how frustrating this is for you and I hope to provide you information which is accurate and useful, even though it may not be the news you were hoping to get.

Expert:  Loren replied 1 year ago.

Unfortunately, without a written agreement with the landlord, it cannot be treated as an addendum. Likewise any "silent" agreements between the prior and new owner would not be binding.

Expert:  Loren replied 1 year ago.

You are going to need to come up with a new agreement to determine the allocation. The agreement you had with the prior owner is not binding on an asset purchaser.

Expert:  Loren replied 1 year ago.

I realize this is probably not the answer you were hoping to receive. Also, please remember that this is not necessarily a moral judgement on my part. As a professional, however, I am sometimes placed in the position of having to deliver news which is not favorable to a customer's legal position, but accurately reflects their position under the law. I hate it, but it happens and I only ask that you not penalize me with a bad or poor rating for having to deliver less than favorable news.

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