Legal Question in Real Estate Law in California
I recently sold a business lease, a jewelry shop in a mall. There was pending construction work that did not start. The construction work started after I sold the business. The buyers are claiming I'm responsible for the construction. Who is responsible in this case? Our contact for the construction was voided.
2 Answers from Attorneys
Technically, your transfer of the remaining time on your business lease would be considered an assignment, rather than a sale. Be that as it may, you probably had a duty to inform the buyer or assignee of any and all significant negative problems and issues that you knew about, or should have known about, that would affect the value of the business and the leased premises. If there was construction work in the offing, not permanently canceled and likely to get under way after the deal closed, you may indeed be liable for losses and costs suffered by the buyer. You may have a defense based on your having reasonably believed that the work was canceled and unlikely to be rescheduled, if that's the case.
Whoever assumed that liability under the sale/lease contract that was correctly and thoroughly drafted. You did have one didn't you???
If not, then you get to argue about in court ultimately if you can't resolve it yourselves.