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Lucy, Esq.
Lucy, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 29565
Experience:  JA Mentor
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When I signed the lease agreement 2 years ago, I was told by

Customer Question

When I signed the lease agreement 2 years ago, I was told by landlord that all tenant at food court gets 2 years lease no option to renew with key money $15,000.00 for non refundable key money. I want to get another lease but landlord wants $40,000 non refundable key money again, 2 tenant at food court left, one existing tenant renewed the lease with $15,000.00. Landlord told me that they have a person who wants to give $40,000 to landlord in order for me to renewed lease I need to beat the offer price. I have a prospect buyer but landlord is so unreasonable with lease. I need your advise on this matter. Thanks
Submitted: 1 year ago.
Category: Real Estate Law
Customer: replied 1 year ago.
My lease will be expired on Nov 30, 2015 but there is rumor that they already signed the lease with other for my space.
Expert:  Lucy, Esq. replied 1 year ago.
Hi,

My name is ***** ***** I'd be happy to answer your questions today. I'm sorry to hear about your situation.
When a lease doesn't include an option to renew by the tenant, I'm sorry to say, there is no legal right to the space after the lease expires. It is up to the landlord and tenant to negotiate and decide if they want to continue to work together, and the fact that America is a free market means that the owner is unfortunately free to lease the space to the highest bidder. If he's not being reasonable in his demands, then your right is to take your business elsewhere. But I'm sorry to say, there's nothing I or anyone else can tell you that will force the landlord to renew your lease - especially if he's already signed a new lease with someone else, which was his right. And it's impossible to force someone to be reasonable if you don't have a clause in the contract that requires him to negotiate a renewal in good faith.
The options here are to decide whether you're willing to pay an exorbitant amount to keep your commercial lease, or seek another space. Your buyer would still be able to buy the company name and any assets, and you can negotiate what you think is a fair price for that - but you need to have a lease in place before you can sell the right to that space, because at the moment, you don't have one. You are allowed to see if the buyer would be willing to pay an extra $40,000 before you agree to anything. It may also benefit you to put contingencies in any sales agreement to protect you if the lease doesn't work out. And it's a good idea to confirm with the landlord whether he's leased the space to someone else before you spend your time doing that.
I apologize that this was probably not the Answer you were hoping to receive. However, it would be unfair to you and unprofessional of me were I to provide you with anything less than truthful and honest information. I hope you understand.
Good luck.

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