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Delta-Lawyer
Delta-Lawyer, Attorney
Category: Real Estate Law
Satisfied Customers: 3546
Experience:  10 years practicing IP law and general litigation
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My family has a lease in Atlanta Georgia . My mother is no

Customer Question

My family has a lease in Atlanta Georgia for showroom downtown. My mother is no longer able to run the company and we have closed other showrooms in High Point, NC and Las Vegas, NV. The Atlanta landlord is not amicable to an early release as the location of the showroom is bad and they will likely be unable to re lease any time soon, they promised the location would be populated by other showrooms but it never happened. My father has now been diagnosed with bone marrow cancer so any chances of saving to company are slim. We don't want to just walk away from the lease and are prepared to pay something but not the remaining $560,000. Thoughts? My brother and I are in our early twenties and not skilled to run the business.
Submitted: 6 months ago.
Category: Real Estate Law
Expert:  Delta-Lawyer replied 6 months ago.

I am sorry to hear about your troubles here. It is certainly a bad spot legally, but the more important issues relate to the family. That comes first. I am a licensed attorney with over a dozen years of practice experience handling matters of this nature. It is a pleasure to assist you today.

The first thing you need to do is look at the Atlanta lease and see if it mentions in any way that the property owner will seek and provide other showrooms entities, as they had promised. If they have not done so and this is require by the lease, then that is a material breach of contract and it may ultimately allow you guys to walk without owing any money.

If that is not mentioned in the lease, but you guys (or your father) can attest and sign an affidavit to the effect that they promised this, then if you have to default on the lease, you can use this as a defense. If this is litigated, you can state that the reason you had to default is because you depended on their promises to your detriment and it caused the ultimate default because they did not live up to their end of the deal. In litigation, this could certainly mitigate the amount owed in the end, if not absolve you completely.

I would have your father sign a sworn statement to this effect that is notarized. Since he has a serious illness, you want to be able to preserve his word and the facts in the event he is incapacitated later.

In the interim, as you have been doing, you need to negotiate in good faith with the owner to try to get out of the lease or amend the lease payments to something more manageable. I would send a certified letter with a return receipt in which you explain that you need to either cancel or amend the terms. Further explain that the reason you are in this position is because of their inability to provide other showrooms and that is a legal issue to contemplate. By sending a certified letter, you are establishing a legal record of your attempts at reasonableness. You are also placing them on legal notice of your position.

Going forward, you need to:

- Review the lease to see if the owner stated that would work to provide other showrooms;

- Attempt to negotiate to new terms or cancellation, first by certified letter and then through more conversations;

- Work with your accounting personnel to move assets around to prevent a massive hit if you default and they come after you;

- Get the affidavit from your father as to them promising other showrooms, etc.

Right now, you need to show diligence - in the event of future litigation as well as attempts at being reasonable. You have clearly already started that process and are doing great. Understand that there may be no way to avoid liability totally, but there are measures to take to protect your family's assets and to place yourself in a better position from a legal/litigation standpoint.

Let me know if you have any other questions or concerns. Please also rate my answer positively (THREE OR MORE Stars) on the ratings bar on your end so I can receive credit from the site for my response.

Best wishes going forward!

Expert:  Delta-Lawyer replied 6 months ago.

Did you have any other questions?

Expert:  Delta-Lawyer replied 6 months ago.

Just checking to see if you have any other questions or concerns. I want you to be as comfortable as possible moving forward. Thanks

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