Commercial Tennant-dispute with landlord over lease transfer

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SBAYAWA

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Commercial Tenant/Landlord Dispute

Since December 2004, my family has owned a small restaurant, renting and operating from a commercial space in a mixed-use building in San Francisco. We closed the business in March of 2009 due to financial problems, but have made negotiations with another family to purchase the business and take over the lease of the space. The purchase has not yet been completed as there are still conditions to be met (i.e. transfer of lease, building permits to be resolved) but the proposed new owners have been slowly preparing to open by applying for required licenses and permits, etc.. Until now, the restaurant is not yet operating. To ensure that the business is not sold to another potential buyer, the proposed new owners have agreed to make the rent payments on our behalf as we are not able to pay them ourselves now that the business is closed. For the past 9 months, our landlord has been accepting payments from the proposed new owners.

We have requested various times for our landlord to transfer the lease. We have submitted all documents and information (financial documents and personal information on the proposed new owner) requested by the landlord prior to approving the transfer but they continued to delay. I assume it's for the reason that our lease is up for renewal this January 2010.

We have sent notice to the landlord that we will be exercising our right, per our purchase and lease agreements, to renew our lease but have received notice from them that we are required to vacate by December 31, 2009 because we are in breach of our contract. They claim we have allowed the proposed new owners to occupy the space although our landlord has not yet approved the transfer of the lease. The proposed new owners have neither occupied the space nor operated from the space.

This is not the first dispute we've had with our landlord. Our landlord has continuously tried to interrupt our business by making complaints to all departments in San Francisco, (building, health, etc.); by entering the restaurant during business hours and making comments to customers and employees that we are not fit to be open; by trying to prevent our remodel and improvement efforts (prohibiting entry to hallways where cable/internet connections are located even after proper notice and request for entry has been made) etc. We have notified our landlord many times of leaks throughout the restaurant that have caused damages to products and equipment and often times created health hazards. Despite the numerous requests for repairs, many leaks remain. In 2006/2007, we sued our landlord due to harrassment. The case went to mediation and was settled.

We would like to pursue this matter legally so that we may renew our lease and transfer it to the new proposed owners.

What advice can you offer in how to handle this situation?
Thank you for your help...
 
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