Legal Question in Business Law in California

You need to review the purchase agreement for the business and the lease with the landlord. Those should both reference the issues you mention.

It's not clear from your post whether you subleased the premises, or are a complete stranger to the lease. If you are subleasing the premises to her, then you are her landlord. But a landlord cannot engage in self help and perform a lock out. If she is defaulting on rent to you, you need to bring an eviction proceeding, called an unlawful detainer.

If you are a stranger to the lease between her and the landlord, then you still have no right to lock her out. You would need to review your written purchase agreement with her. Do you have a chattel mortgage in place for items on the premises? If so, you need to demand possession of the items. If you are a stranger to the lease, I also do not understand why the landlord would come after you. Are you a guarantor?

First, you supposedly "sold" the business, so you can't lock her out unless you have a security agreement or clause giving you that right. Absent that, the business is hers and all you have is a claim for the payments. As to the landlord's claim -- did you sell the business without an assignment of the lease? Uh-oh! The moral of the story is never sell a business without getting paid in full and getting yourself off the hook for leases and all other liabilities of the business unless you also get excellent collateral including the buyer's personal guarantee and indemnity.

As a Franchise Attorney I can only add this. Do you have some security included in your promissory note (like real estate with sufficient equity) to go against if the buyer defaults? Hope you thought of that ahead of time. Also, many sellers don't realize, assigning a lease doesn't take them off the hook unless the landlord consents to it (and they don't). Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation