Help, Can I get out of a Retail Commercial Lease after 2 weeks?

[VisionTilt]

Hey all,

I just signed a commercial lease about 2 weeks ago. I've now realized I'm not going to get the funding that I was hoping for in order to build out my store.

I put $10,000 down on the space, $5,000 deposit, and $5,000 for the first months rent......

They've cashed my checks,

Also, if it makes a difference, the old tennant is still in the location, I was not set to take it over until June 15th. Also, I am in Texas.


I'm trying to talk to the lanlord about the situation, but if things don't go well, What should I do, Do I lose all my money????

 

[freebird]

Hmmm... that is tough and I'm very sorry to hear. The best bet is to always put into the lease contingencies that will occur. It would seem that the best thing to do would be to find another reasonable tenant for the space as soon as possible to mitigate damages. You might be able to get your money back on the lease if the new tenant moves in although you might still be on the hook in the event the tenant moves out and breaks their lease. You should do this asap because not only will you be out the money but the landlord can hit you up with rent for every month the space is unoccupied -- however, if the tenant is still there... great. Per your lease it is likely that you cannot be charged the rent while the prior tenant isn't there, or at least that should be the case under the lease.

What you should do immediately is READ YOUR LEASE! It contains all the terms which we are speculating about here. What may be there is a clause that explains what your remedies are if the premises are occupied, which they are in this instance. Make sure you also have proof that the premises were occupied as of certain dates if you can. Perhaps this might be an "out" for you...

Commercial leases are much more difficult to deal with then residential, which is why it is always a good idea to have an attorney deal with significant commercial leases.

Originally posted by VisionTilt
Hey all,

I just signed a commercial lease about 2 weeks ago. I've now realized I'm not going to get the funding that I was hoping for in order to build out my store.

I put $10,000 down on the space, $5,000 deposit, and $5,000 for the first months rent......

They've cashed my checks,

Also, if it makes a difference, the old tennant is still in the location, I was not set to take it over until June 15th. Also, I am in Texas.


I'm trying to talk to the lanlord about the situation, but if things don't go well, What should I do, Do I lose all my money????

 

[VisionTilt]

Well I certainly don't think I'm going to find someone to rent the place, I don't know anyone in this part of the country, let alone someone who wants to lease a store..


So that just leaves me where I was... Would I be naieve to think that the landlord might just let me out of this lease? it's only been a 2 weeks since I signed the papers, and a week and a half since they signed them, and I wasn't supposed to even take posession of it until the middle of June?


The sad thing is we really want to be in there, but we just do not have the funds to finish it out the way we want, I'm hoping the landlord will work with me and let me take a smaller space that would be easier for me to finish out, and would allow us to get our store??

I guess I'm just wondering.. if they say .. "sorry, you signed the lease, so you're accountable, unless you want to forfeit your $5,000 deposit, or maybe $10,000 down" Will I have any recourse?

 

[Michael Wechsler]

Originally posted by VisionTilt
Well I certainly don't think I'm going to find someone to rent the place, I don't know anyone in this part of the country, let alone someone who wants to lease a store..


So that just leaves me where I was... Would I be naieve to think that the landlord might just let me out of this lease? it's only been a 2 weeks since I signed the papers, and a week and a half since they signed them, and I wasn't supposed to even take posession of it until the middle of June?


The sad thing is we really want to be in there, but we just do not have the funds to finish it out the way we want, I'm hoping the landlord will work with me and let me take a smaller space that would be easier for me to finish out, and would allow us to get our store??

I guess I'm just wondering.. if they say .. "sorry, you signed the lease, so you're accountable, unless you want to forfeit your $5,000 deposit, or maybe $10,000 down" Will I have any recourse?

I'm wondering what you think the basis of your recourse might be. There really is no "I've made a bad deal so you are required to reasonably negotiate a new deal" legal concept or law that I am aware of.Perhaps you may want to use negotiation strategy such as "if I am going to be hit with the full amount of rent then my business will go completely under and you won't have any income of a going concern to collect rent from and you can't squeeze blood from a stone." That may work. I think that is what you were saying in your reply.

I wish you the best of luck with this. A good negotiating strategy seems the best way to go right now.