Legal Question in Criminal Law in Texas

Greetings!

We're trying to buy a commercial building / property that the owner currently has rented to a tenant that's operating a huge night club....the tenants lease expires 11/2011.

At the beginning of the negotiations, we signed a standard confidentiality agreement between our group and the property owner. But during the course of our due dilligence, we've discovered an endless stream of state and federal drug, tax and conspiracy crimes being committed by the tenant.......but clearly known about by the landlord.

The crimes are so egregious, that we feel that we need to go to the authorities, but are afraid of getting sued because of breaking the confidentiality agreement between us and the property owner.

What do you suggest?

Thank you!


Asked on 8/03/10, 11:39 am

1 Answer from Attorneys
Keith Engelke Law Office of S. Keith Engelke

It is difficult to answer your questions without reviewing the agreement you signed or knowing the facts of your due diligence..

However if you report the crimes and the tenant goes out of business and the landlord loses the tenant, or his property is seized, I would be concerned that you might face liability for breach of the confidentiality agreement.

I suggest you consult an attorney to review what you actually know and whether it triggers any obligation to report these alleged crimes. If it does give rise to a reporting obligation, you would want to confirm whether you could use that obligation as a defense against any suit

for breach of the confidentiality agreement.

I would also recommend that you seek legal advice to determine if any of these alleged crimes could result in the seizure of the property you are thinking about purchasing. Obviously you would not want to buy something that could be taken away from you.

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Answered on 8/08/10, 1:13 pm


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