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iemitremmusi · Mar 5, 2008, 02:30 PM

Hello,

The situation is Company A had a lease to rent office space inside Company B. I'm company A. The lease expired September of 06 and was extended to September of 07 (agreed to and initialed by both parties). After it expired, it went to a verbal month to month lease. On February 29th Company A told Company B they would not be continuing the lease for March and will pick up their stuff as soon as possible. (Office Furniture, Equipment, Files, and Licenses)

Company B said that proper notice was not given to terminate a verbal lease and that they would not give the property back until $1000 paid for the month of March. And also change the locks, denying access.

Company A filed for Emergency Possesory to get their stuff from the office. Did Company A break any statutes by not giving notice? The only statue we could find on the matter required one month notice IC 32-7-1-3, but it has been repealed.

Is Company B able to file for rent and/or other damages for terminating a verbal monthly lease?

Is Company A able to file for rent and/or other damages for unlawfully holding their stuff and if so, what effect does that have in the claim for unpaid rent?
Can Company A file for damages or have a claim dismissed because Company

Fr_Chuck · Mar 5, 2008, 03:50 PM

If you are on month to month, you can not tell them on Feb 29 that you will not be renting in March, you owe March rent. So yes Company B will sue and win for their damages. Company A has not legal damages, since they were in breach.

iemitremmusi · Mar 5, 2008, 03:59 PM

Originally Posted by Fr_Chuck

if yoiu are on month to month, you can not tell them on Feb 29 that you will not be renting in March, you owe March rent. so yes Company B will sue and win for thier damages. Company A has not legal damages, since they were in breach.

It doesn't matter that Company B is breaking the law by changing the locks and holding belongings unlawfully as a landlord cannot take possession of a tenants property in order to enforce an obligation of the tenant to the landlord under a rental agreement IC 32-31-5-5?

Fr_Chuck · Mar 5, 2008, 04:56 PM

If you gave notice and moved out ? Told them you were not paying them, and did not occupy the building, it may or may not be illegal for them to take possession of it, to get it ready to rent out to someone else.

When my tennants move out in the middle of the night, I go in and move their junk into storage and start fixing it up. But no, there violation of that code does not stop the fact that you owe them the rental fee.

ScottGem · Mar 5, 2008, 04:56 PM

No it doesn't. While two wrongs don't make a right, they are still separate issues. Company A violated the terms of the lease, they are liable for damages because of that. Company B may have unlawfully detained Company A's property and would be liable for damages resulting from that.

iemitremmusi · Mar 5, 2008, 05:24 PM

Originally Posted by ScottGem

No it doesn't. While two wrongs don't make a right, they are still separate issues. Company A violated the terms of the lease, they are liable for damages because of that. Company B may have unlawfully detained Company A's property and would be liable for damages resulting from that.

What kind of damages can company B sue for? We listed out all the equipment to a value of 2750 approximately. It's hard to estimate the damage done by withholding items necessary to continue to conduct business and I'm not sure that those can be sued for as damages.

iemitremmusi · Mar 5, 2008, 05:27 PM

Originally Posted by Fr_Chuck

if you gave notice and moved out ? told them you were not paying them, and did not occupy the building, it may or may not be illegal for them to take possession of it, to get it ready to rent out to someone else.

when my tennants move out in the middle of the night, I go in and move thier junk into storage and start fixing it up. but no, there violation of that code does not stop the fact that you owe them the rental fee.

We didn't move out. Told them that we were going to. They said they weren't going to let us until we paid for March. According to Indiana code they'd have to give us notice to move our stuff and they're not allowed to change the locks in order to settle a rent dispute.

ScottGem · Mar 5, 2008, 06:37 PM

They can sue for rental due. There is no question that A owes for March.

iemitremmusi · Mar 5, 2008, 06:38 PM

How much can A sue for, sorry, that's what I really meant for the question.

ScottGem · Mar 5, 2008, 06:56 PM

For at least the month of March, maybe more depending on the terms of the original lease.

LisaB4657 · Mar 5, 2008, 07:56 PM

When you cite the Indiana code, are you sure that you are citing the right law? Residential lease law usually does not apply to commercial leases.

iemitremmusi · Mar 6, 2008, 07:18 AM

How much can A sue for?

ScottGem · Mar 6, 2008, 07:24 AM

Sorry, I got confused beyween A and B. The landlord can sue for unpaid rental. Clearly, they can sue for March rental. Whether they can sue for more depends on the terms of the lease.

The tenant has little grounds for a suit. They can sue for damages or potential loss of income because they could not get their equipment. Whether they will win is another question.

LisaB4657 · Mar 6, 2008, 07:37 AM

I just went and looked at the Indiana Code you referenced. As I suspected, you are trying to apply residential landlord/tenant law to a commercial tenancy. That won't work. The IC specifically states in 32-31-2.9-3 that the law applies only to rental agreements for dwelling units.

Now back to your original question. Pursuant to common law, a tenant in a commercial tenancy must provide at least 30 days advance written notice of its intention not to renew a month-to-month lease. So A must pay B the rent for March. If A does not pay, B can sue for it and will almost definitely win.

As for A's rights against B regarding the changing of the locks and denial of access, that depends on Indiana's Code and the common law decisions regarding the landlord's right of distraint. If I were the attorney for B I would argue that A committed an anticipatory breach of the agreement, thereby giving B the right to protect its property and protect its right of distraint against A's property. If Indiana does not permit distraint in a commercial tenancy then A will probably win. If Indiana does permit distraint (and it probably does) then A will probably lose, but A may have a claim against B for intentional interference with business.

If you are A, good luck. You're going to need it.

iemitremmusi · Mar 6, 2008, 08:35 AM

Okay, well where is the IC for commercial? I cannot find that anywhere.

The only thing I found is that it is against statue to change locks or take possession of property regarding a rent dispute, but that was in the same chapter as the others, so it's probably not commercial.

LisaB4657 · Mar 6, 2008, 08:43 AM

There probably isn't any IC for commercial tenancies. That is usually controlled by the written lease, if any, and common law.

I did see that Indiana has statutes regarding licensing for distress sales, so it appears that the process of distraint is permitted.

I suggest that you pay the landlord the rent for March. Then they have to release your property.

iemitremmusi · Mar 8, 2008, 07:05 AM

Just an update. Company A filed the Emergency Possesory Order to get their property back. The judge granted the petition and set court for the very next day. Company A had to personally serve B. B signed a release and agreement allowing A to get the property and settled for half of rent. Everything ended well for both parties, they left on good terms with each other and A then dismissed the court hearing, which is good, because according to all of you they would have had to pay the full rent.

ScottGem · Mar 8, 2008, 07:36 AM

Yep, you did good.

LisaB4657 · Mar 8, 2008, 07:41 AM

Congratulations. That worked out well.

iemitremmusi · Mar 8, 2008, 07:42 AM

Thanks for all the advice/help!