Commercial Real Estate Investment/commercial eviction

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Question
I currently am leasing a commercial store space and am behind in making payments for back rent owed.  I received a letter from an attorney advising me that I had 5 days to pay all past due amts.  This came after I had made a verbal agreement to pay by the end of the month with the leasing manager.  I should have all of the money paid by the time I get a court date. (approx. 2 weeks)  Is it too late to pay in order to avoid eviction and what are the chances that I will pay all of the fees due and still be evicted by the landlord for paying late or because they may have a more profitable tenant lined up?

Answer
Michelle-

I am not an attorney, nor do I know the particulars of the Landlord/Tenant laws in your jurisdiction.  The law may be different where you are located, from the Landlord/Tenant laws in other areas of the country.  I can answer your questions based on how this process often works is some of the areas I have worked in the past.

Did the letter say that you were being evicted in five (5) days if you didn't pay the past due amounts?  Or did it simply say you had five days to pay?  If it said you were being evicted in five days you should expect that is probably what will happen - although that seems like an unusual process to me.

Normally, first tenants are called to appear in court where a judge will discover what the facts in the situation are and make a determination if you are in default of the lease terms because you have not paid the amount of rent stipulated in the lease.   If you know how much you owe, if possible, it would be best to pay the rent before going to court.   If you do not have the rent that you owe, the judge may simply stipulate how much you owe and grant the landlord the right to evict you from your premises.  The landlord, in many areas, must then attain a Writ for Eviction which is a separate process that can take 2 to 30 more days depending upon many logistical matters, however, the landlord must first have the ruling by the judge in order to acquire the Writ for Eviction.

When the landlord has the Writ for Eviction he will then come to your premises with a local police representative and others and actually remove everything from your store and put it nearby outdoors or have it taken to a storage facility - it depends on the law in your area where your possessions are moved.

In some areas you have the right to pay the amount the judge determined in court that you owed (past due rent plus any fees) right up until the moment the local law enforcement official knocks at you door and tells you they are there to evict you.  If you pay them every penny of the judges amount in cash or cashiers check - again, this may be specific to your area - the eviction group will leave, and it is all over at that time.  But you must pay every penny of the amount the judge says you owed.  Don't try to dispute the amount with the law enforcement officer when they arrive at your shop - they can only accept the judges previously determined amount.

OK, now you know what I have seen happen in some areas.  Let me repeat that the landlord/tenant laws where you are located may dictate a completely different legal process that the landlord follows to collect his rent.  There are many states that allow what is legally referred to as "Self Help", where the landlord does not need to first go to court before he can get his past due rent; landlords in these areas can simply change the locks on your doors while you are out one day and not let you back in until your rent is paid.  Don't worry however, if your landlord could legally do that I would assume he would have already done so.

Let's back up a bit however. There are several other matters to consider.

You should get an attorney if you can afford it.  If you cannot, contact your closest Bar Association office and ask them if they have anyone that provides "Pro Bono" legal services in cases where the defendant can't afford an attorney.  Many offices have such capability, although they may not have an attorney available to do so at the time you call.   You can also call a legal aid service that provides legal assistance at no charge, usually they have law school students or legal counselors that assist you.  I would also contact your local court and ask them if they know of any organization or person you can contact to acquire legal help.  

Finally, you could go, as soon as possible, to the court where you are told your case will be heard, and you might find several "legal assistance" types of people moving around the court area with one or several people whose cases are being heard in the court that day.  You might inquire from them who they might recommend assist you with your case.  If you get a summons to appear in court, you must do this immediately because anyone assisting your case needs as much time as possible to help you before the day you go to court.  

If you had a verbal agreement with the leasing manager who made an agreement with you to pay by the end of the month, be prepared with that manager's full name, the address of their office, the date and time you talked with them, and have concise notes prepared to read that briefly give the salient details of what you agreed to.  If anyone else heard this discussion, have their name also - even if they work for the landlord.  If you end up having to go to court, be certain to advise the judge of this information.  Do NOT simply say to the judge: "I talked with a manager - I don't remember their name, and they said I didn't have to pay yet".   That won't work.  The point is, you want the judge to know that someone who is the employee of the landlord, made specific other arrangements with you from what the landlord's attorney's letter is telling you about having only five (5) more days to pay the back due rent.

Again, I am not certain regarding what the law stipulates in your area, however, in many areas, if you pay all of the rent and fees that you owe(cash - get a receipt- or cashiers check) prior to eviction, you will be allowed to stay in your premises even of your landlord wants to lease your store to someone else that is "more profitable".   Check that out for your area however, I cannot vouch for the law in your area.  If you have ALL of the money that the landlord, or preferably the judge, determined that you owe, and you don't seem to know what to do with the money to stop the eviction process, ask a local sheriff or police officer what to do with the funds to assure that the eviction process is stopped.  Often they will help you even though they don't really have this responsibility.

I am sorry you are in this predicament.  You are doing well so far, so do not give up and stay strong.   Economic difficulties are everywhere in our country now, so don't feel alone in your struggle.  I hope I have been of some help.  At no time should you rely on the generosity of your landlord or a judge to help you.  If there is anything else I can help you with, please give me as many details as you can and send me a follow-up question.

Good luck and god speed.

-Jim

Commercial Real Estate Investment

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Jim Avancena, CPM

Expertise

Best qualified to answer questions that involve commercial leases, that is, basic issues as well as the often unexpected effects of the complexities and inter-relationships of the provisions a lease may contain, explain how seemingly innocuous text in your lease can have a major impact on a Tenant or Landlord and their business operations, and the common practices utilized in the industry. I can untangle most matters that may come up from the time a tenant begins searching for a office or store space and the lease acquisition process, concerns related to remodeling/improving the leased premises, moving-in, subletting or assigning the leased space, and a long list of problems that may come up during the lease term and even after a tenant moves out. I have practical experience with most property management issues and resolving landlord and tenant disputes - especially those involving what may appear to be overcharges assessed for additional lease charges like CAM costs, operating expense reimbursement, real estate taxes, utilities, construction improvements etc. Note that I am not an attorney and cannot provide legal advice.

Experience

Thirty years active experience in the commercial real estate industry as a licensed real estate broker in the Washington DC Metro area (DC, Northern Virginia & Maryland). I have been admitted (approved) by the Maryland and DC courts to testify as an expert witness on the subjects of Commercial Leasing and Property Management in the area of standard industry practices. I have had a business for the last 14 years advising virtually every form of business entity from large national corporations to the smallest ma & pa new businesses regarding a wide range of commercial real estate matters in addition to property management and commercial leasing.

Organizations
Currently my three children keep me so busy that it is difficult to participate in organizations with continuing and specific time requirements.

Publications
I publish a local commercial real estate newsletter titled: "Tenants First". My firm was the subject of a high profile Washington Post business section cover page (2.25 full pages) feature story on January 13, 1993; titled "Overcharging Overhead".

Education/Credentials
BA in Political Science from Memphis University, and five years of study in the real estate development summer program at MIT. I was certified as a commercial property manager (CPM-IREM), and currently hold a brokers license in Maryland and the District of Columbia.

Awards and Honors
The same plaques and honors that most others in my industry have earned. I have none that I consider especially meaningful.

Past/Present Clients
Past clients include: The World Bank, George Washington University, National Association of Criminal Defense Attorneys, US Department of Commerce, The American Benefits Council, K-Mart Development, many law firms, a national union, other major organizations, and many, many small business firms and retail operators that I am most honored to serve. I estimate more than 1,500 firms/organizations.

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