Legal Question in Real Estate Law in California

Re: Need to Terminate Office Lease

It may be worth it to determine whether or not the lease has a clause that may be deemed illegal or if there has been a breach by the lessor, or other grounds to cross-complain in the event suit is brought. You may have better leverage having an attorney attempt to negotiate a buy out, or just to have a professional handle it so that you need not deal with this stressfull situation. Contact me directly.

Re: Need to Terminate Office Lease

Inability to pay is not a defense to an action to collect on a lease. The best thing you can do is find a subtenant or assignee, though it may have to be approved by the landlord under the terms of the lease.

Re: Need to Terminate Office Lease

One final observation that doesn't seem to be made in the preceding four responses:

A landlord's damages for the tenant's breach of the lease are capped at whatever the landlord's actual losses would have been, had the landlord made a reasonable attempt to mitigate his/her/its damages by finding another (sub)tenant, using the space itself, or the like. (It is sometimes said that the landlord has a "duty" to mitigate damages, but it isn't really a duty, but only a damages-capping principle).

The above applies to commercial leases as well as residential leases, and I see no reason why it doesn't also apply to a sublease, which is just another variety of lease.

Were the three of you running this brokerage business as a general partnership, or was it three separate businesses under one sublease, or what? Knowing the full details might help a lawyer suggest further ways to limit your liability or exposure to damages.

Re: Need to Terminate Office Lease

One final observation that doesn't seem to be made in the preceding four responses:

A landlord's damages for the tenant's breach of the lease are capped at whatever the landlord's actual losses would have been, had the landlord made a reasonable attempt to mitigate his/her/its damages by finding another (sub)tenant, using the space itself, or the like. (It is sometimes said that the landlord has a "duty" to mitigate damages, but it isn't really a duty, but only a damages-capping principle).

The above applies to commercial leases as well as residential leases, and I see no reason why it doesn't also apply to a sublease, which is just another variety of lease.

Were the three of you running this brokerage business as a general partnership, or was it three separate businesses under one sublease, or what? Knowing the full details might help a lawyer suggest further ways to limit your liability or exposure to damages.

Re: Need to Terminate Office Lease

You might consider a Chapter 13 bankruptcy, you would not have to surrender your property, only a consultation with a BK lawyer can help you decide

Re: Need to Terminate Office Lease

I am not quite sure what your query is--there is no magic bullet to get you out of the lease. A lease is a contract and if you do not pay, the landlord has the right to sue you for the amount you owe under the lease--whether they will or not is really the question. The landlord does not have to work with you, but they might if you agree to some payment arrangement and their only other alternative is to sue you. The best approach is not to whine about your plight or the credit crisis (mortgage brokers are not everyone's favorite charity as they were instrumental in creating this crisis); rather, I would just try to approach them pragmatically and acknowledge that you owe the money but cannot pay right now and then offer to vacate immediately and pay a certain amount in future.