Legal Question in Business Law in Washington

Buying a Business

last month i was planning to buy a business.The seller told me that,before he starts to train me i ve to sign a lease assignment with the landlord which i did.And the landllord said he is not going to relieve the seller from the lease for ninety days,after that i will assume the lease .During the closing date, the escrow company disclosed to me that when they did the serch they found out that 2 different companies had put liens on the business,these are companies which used to supply the business with merchadise,the business ows them more money than what the business is being sold for.i did not know about this information before the closing date.So i withdrew my over for the business,and the escrow company is refunding my earnest money without a fight.Now my question is ''HOW DO I GET OUT OF THE LEASE.''The seller says i am responsible for the lease after ninety days, i understand that he wants to close the busess for good,the landlord tells me that he will follow what is written and sighned,the lease has nineteen more months to go before it expires,since i dont have any business to conduct in the said premisses,i would like the lease to revert to the seller as it was before i came into the picture,Is it possible?..Thanks


Asked on 9/11/08, 12:55 pm

2 Answers from Attorneys
Susan Beecher Susan L. Beecher, Atty at Law

Re: Buying a Business

The other attorney, Mr. Showrai, reviewed for you many possible scenarios. There is a good chance that he has guessed correctly as to what is in the lease, but that may not be the case, and everything depends upon what is written in the lease.

Additionally, there is a possibility that you may have recourse against the "seller" business owner (personally), depending on the circumstances under which he secured your cooperation to assume the lease. Did he represent to you that the business was in good financial health?

Considering the cost you are facing if you do nothing, I would urge you to speak with an attorney about this. Your options depend on the details of what happened in your discussions with the seller and the landlord, and on what is written in the lease assumption that you signed.

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Answered on 9/12/08, 12:37 pm
Amir John Showrai The Pacific Law Firm, PLLC

Re: Buying a Business

If I understand you correctly, you signed the lease independent of the purchase agreement for the business, and there is no contingency clause in the lease that says it will take effect only if the purchase of the business closes escrow.

If so, then I am afraid you are in a bit of trouble, since the landlord has no obligation to let you out of the lease. However, there are a couple of options available to you. One is that you can find a suitable replacement tenant. Unless you and the landlord agree otherwise, you will remain liable for the remaining 19 months if the replacement tenant fails to pay the lease, but at least someone will be there and hopefully paying for the space.

Additionally, if the replacement tenant only agrees to pay a lesser amount than your lease, then you are liable for the remainder. Thus, if the lease is $1,000 per month, and the new tenant is willing to sign up for $900 per month, you are liable for the remaining $100 each month.

In addition to you, the landlord also has a duty to mitigate their damages and try to find a suitable replacement tenant on their own as well. You should inform the landlord of your intentions and tell them that although you may be liable for the remainder of the lease, they are under a duty to take reasonable steps to advertise the property to new prospective tenants. (Keep in mind, you are liable for the advertising costs the landlord incurs, as well as any professional fees, such as a lawyer who negotiates a new lease, or a real estate agent's fees for finding tenants.)

If you need help in sorting through this all, please feel free to e-mail or call me anytime.

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Answered on 9/11/08, 5:11 pm


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