We have a tenant with a commercial lease through August 2011.
We were about to sign a lease for space in a neighbor's building, but decided to ask our tenant first if she had ever considered getting out of her lease early. She averages 16 days late on her rent payment and makes remarks leading us to believe the rent is a hardship even though she no longer pays her garbage fee and was given a break of $60 monthly on her rent.
When we approached her on the idea, she very happily agreed ("This was meant to be!") since her husband was offered a job out of state and she even had going out of business postcards printed up before we agreed upon a date for her to vacate.
She is now telling other business owners and her customers that she's being kicked out. Her lawyer wants us to give her the last two months rent free plus pay for "improvements" she made on the building before we even bought it.
We have since hired a lawyer who says this woman doesn't have any leverage to back her up. Is this so? Should we be concerned?
Thanks for your help.
Ray and Carrie

If you can prove that you approached her and that she agreed, then no. However, if one or the other party wishes to terminate a lease early, generally there is a monetary buyout. I would discuss this with your attorneys.

What type of "improvements" did she make? Were they permitted by her lease? If she made changes and can't show that she had the landlord's permission then you can tell her that not only will you not give her 2 months rent free, but she'll have to pay you to remove the "improvements" she made.

Based on what you've said here, you are in a way better position than she is. And as long as the things she's saying to other people won't affect your future business, don't worry about what she's telling them. If anyone ever questions you about it you can always say "She can say that if it makes her feel better."

Why would she expect us to buy her out? We were more than willing to rent from our neighbor. We have told her attorney repeatedly that she can stay, it's not a big deal to us. We didn't want to sign a lease to rent another spot then find out a month or two later that she was going out of business. Were we wrong to ask her?

She put in carpet, which we will have to remove and daycare sized toilets and sinks that can't be used by adult-sized people. She had a doorway arched and her attorney says she had an asbestos floor removed. The remodeling all happened before we bought the building a year ago. The previous owner thought he paid for much of this but isn't the type of person to take the time to look it up. Aren't these all costs of doing business? Why should we pay for things she did before we bought the place?

You shouldn't have to pay for any of those things. If she didn't have written permission from the landlord to do those things then you can charge her for the cost of removing them.

Of course there's another way to deal with this. If you just want her out without any headaches, offer her the last month free. Make sure your attorney prepares a release for her to sign, releasing you from all claims she may have.

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Originally Posted by CarrieandRay

Why would she expect us to buy her out?? We were more than willing to rent from our neighbor. We have told her attorney repeatedly that she can stay, it's not a big deal to us. We didn't want to sign a lease to rent another spot then find out a month or two later that she was going out of business. Were we wrong to ask her?

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Like I said, you asked her if she was willing to terminate her lease early so you could take possession of the property. Generally, in such a situation a buyout is offered.

Now I understand that you were doing this because there were indications her business was going down the tubes, but that doesn't alter general business practices.

But I certainly agree with Lisa that you are in the better position. I suspect after she agreed, she spoke to someone (maybe posted on a board like this) and got advice that she should have held out more concessions before agreeing.

If she would have held out for concessions, we would have dropped the topic immediately. It was initially a win-win situation for both parties. She wants to move out of state, we want a place for our business; whether it's in our building or not is immaterial to us.

Had she held out for concessions, we would have immediately dropped the topic. Initially it was a win-win situation for both parties. She wants to move out of state with her husband and we want a place for our business. Whether it's in our building or not is immaterial to us.
Thanks for your input. This isn't a comfortable situation, but it will pass.