Exit Strategy for Breaking Commercial Lease... Can I Walk Away?

Question

I am a new business owner and am still learning.

On sept 15th 2012 - I had realtor who showed me commercial space for a mini day spa start up. It was a 1000 sq ft. The realtor took me to their office and they drew a lease where I signed a 5 year lease and put down a 800.00 deposit.

The lease I signed said I would start paying rent oct 1st 2012. When that time came the landlord still had her personal furniture in the space and still had not started on the reno per she said she thought we weren't going to open till Nov 1st.

She wanted payment for October even though the things on the contract specifically named weren't completed yet. I declined payment per plumbing, floors, lighting weren't completed.

She said she understood and said she would have the work done in 2 weeks. Well 2 weeks passed and nothing has been done. The land lord said she was going through a marital separation and her husband used to do her work for her.she also said her funds were limited. She said in 2 weeks this will done per I found a guy to do the work and it will be done probably before then.

Well to make a long story short its now Jan 2013 some (shotty work that i will have correct later) has been done but the things listed on the contract have not been done. In addition I noticed the heating and air doesn't work and i told her (I told her 6 weeks ago). Its still not repaired.

I am tired of waiting and I want to know if you think I can get out of this contract. Do i have any rights since i already signed the lease.

Also, should I get the real estate agent involved who drew up the contract since i signed at his office and he got paid a finders fee.

I no longer want the contract? Please help! Any advise will be useful. Thanks!

Answer 1

What does your lease say. My commercial leases specifically state if the property is not ready for the tenant within a certain period time (usually 60 days) either party has the option to cancel the agreement.



In my option over 90 days not gaining possession of the premises is a reasonable time to be able cancel the lease agreement if that is your desire.

Answer 2

What state do you live in?



Definitely contact the Realtor you used. You used a Realtor and not someone who defines themselves as a Commercial RE Broker. While the Commercial Broker may be a Realtor he certainly wouldn't call himself that. It's something we don't do because it pigeon holes us into a majority of people thinking we only do residential transactions.



Your Realtors experience in Commercial RE is important but not everything.



My guess is the Commercial leasing market is slow where you live? If not the owner should have no problem letting you walk. First send an email. Emails are fine today. Make sure they reply to it. Tell them you are cancelling due to them not performing under the contract and that you want your deposit back. Don't ask, Tell!



They would be out of their minds to pursue anything against you.



Send an email. Move out. Demand deposit back. If they don't return it take them to small claims. Do not pay rent. Move.



Was their a walk through done when you moved in? Was there any written acknowledgement from the owner regarding her lack of performance? If so this is your ticket to walk.

Answer 3

If she has not fulfilled the contract, then sue her.

Answer 4

You should get the agent, then solved your problem.