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CalAttorney2, Lawyer
Category: Real Estate Law
Satisfied Customers: 10244
Experience:  I am a civil litigation attorney with experience representing HOAs, homeowners, businesses and others in real estate matters.
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Our situation is that I leased a comercial and residential

Customer Question

Hi, our situation is that I leased a comercial and residential property 8 years ago. The landlord had stated in the lease of 5 years that if we did any repairs is was our own risk. The plan was that at the end of 5 years we would have the money to make a loan to buy. But the reality was that the property was in very bad conditions and we had to take tons of trash for two months and then bring it to standards. We had to buy exit signs fire extinguisher, build out side stairs and more. in the lease it said we were performing as owners with sewer and paying the mortgage as the rent. At that time payment was of 1500 a month without utilities. after a while taxes when up and we kept on paying the mortgage which is on owners name with the increase. After five years they didn't do another lease but we kept on paying but it went up to 2060.00 and we fell behind on payments. When we tried to make the payments due the bank froze the account and kept for months now the landlord wants us to but or leave because they are losing the property to the bank. We invested over 30, 000 to make it operational now she won't give us the amount we invested or pay over the amount agreed. we have evidence of bank statements, videos, photos of all those years of work and they are asking to see property to sell. What are ours rights? Can we do something about it or would we loose everthing? Thanks for help .
Mrs. Z. Baez
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  CalAttorney2 replied 1 year ago.

Dear Customer,

I am very sorry to learn of this situation.

While what you describe is a very uncommon lease situation (where the rent amount is the mortgage amount, and subject to fluxuation), this is a commercial lease and the parties are held to a much higher standard of being expected to negotiate their own terms, and being responsible for the terms of the contract as they are written (the court will not rewrite the lease, nor impose new terms).

In your question you write that the lease includes a specific term stating that "all repairs are at tenant's own risk" (or something to this effect). This means that there is no recourse or obligation for the landlord to reimburse you for these improvements (regardless as to how much money you invested in the property, or how much you improved it or increased the potential resale value).

If you still want to potentially purchase the property, I would recommend retaining a local commercial real estate broker and see if it would be possible for you to negotiate a purchase agreement of the property (either as part of a straight sale or a short sale with the bank - if the owner is in default, it may provide you an opportunity to purchase the property for less than you would pay at market).

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