Legal Question in Business Law in California

Lessor master leasse and lesse??

I leased a used car lot in S.Fernando valley for a number of years, remainder now is 13 months @ $4000.00 month, plus option 4 more years. I incorporated after entering into the lease agreement, 3 years ago I sold the business to another individual, Day of transfer to the new owner b4 closing of escrow I was called with the new buyer to the landlord lawyer's office where we met all involved, Land lord with his lawyer refused to sign the transfer of lease to the buyer unless I signed and accepted to be the master lease holder,so in case of default by the buyer according to the lawyer, the landlord could come after me, to get his rent money. Business went bad for the new buyer( Lessee), he stopped paying the rent and I received a letter from the landlord asking for money.... Is that legal? to refuse the business sale unless I accepted their terms, in which I had no choice,

I did have the buyer at the time to sign a document, says briefly that he will discharge and acquit me from all claims suits actions liabilities relating to the lease assignment modifications in law and equity etc..

I think that he trasfered his property apt. building (s) into someone else's name.

Please advise

Joe


Asked on 10/24/08, 8:22 pm

1 Answer from Attorneys
Edward Hoffman Law Offices of Edward A. Hoffman

Re: Lessor master leasse and lesse??

It's perfectly legal. The landlord originally agreed to make a contract with you, not with your corporation (which didn't even exist yet) or with the man who later bought the corporation. You can't force the landlord to make the same agreement with someone else; for all you know, he never would have made that agreement with that person in the first place. For example, he may be a much worse credit risk than you.

The fact that you sold your corporation had no bearing on your personal obligations under the lease. The landlord didn't have to let you out of the contract because you made another deal with someone else. You should have discussed your planned sale with him sooner so that you could have (a) found out what he was willing to do before you committed to the sale, and (b) been in a better bargaining position with the landlord.

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Answered on 10/24/08, 8:37 pm


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