Question hello maybe you can be of some help.
I leased a space for a hand car wash and in the past few months we had nothing but rain. Due to the rain i was not able to pay rent on the space and i was evicted. The business was under a corporation. and the lease was also under a corporation. But before they signed the lease i had to perform a credit check which was done under my mothers name. The landlord said that they will go after the credit and place the past balance on the creidt report. Can this be done if my mothers name is no where on the lease or any contract. I am at the point where i dont know what to do.. Can the land lords sue us personily or the corporation.
Answer Suad
So, it rained and you have been restrained...
In your lease, there should be a section for "Remedies of Default" This will say what LL can or cant do.
also laws vary from state to state, or province to province if you are in Canada.
there are some provisions in Ontario (where I am) that allow for creditors to go after "officers" of a corporation. If your mother is not a part of the corporation, she should have no problem.
One other caveat: I have been on the other side of landlord and tenant disputes having been a landlord myself and I can tell you that in Ontario at least, it's just not worth chasing a small tenant for money.
right off the bat, a lawyer wants a retainer. Next, it will take at least two years to get through the litigation system and the costs during that time can easily rack up to much more than you would all your landlord so it economically infeasible to chase you.
finally, even if they went that route spent all the money and the time and the heartache and won the case, they still need to collect from you at which point you could simply say you don't have the ability to pay -- or in the worst-case you push the "bankruptcy button" which is to commonly abused in my opinion.
if the deal is strictly in a corporation, the worst they can do is go after the assets of the corporation which in this case I doubt are any. I have known tenants that have gone to the extent of putting things in other people's names to try to hide assets so I can't go after them.
so unless you are a "gazillionaire" and have something for the landlord to chase, I would be willing to bet that it is simply not worth their time effort or money.
the only thing worth chasing these days, is if a big tenant were to default, like one of the national tenants, but typically they don't.
this is why I have noticed over the last couple of decades that the gap between a class tenants and be classed as is widening.
you've got landlords with 'A' class properties that attract 'A' class tenants, but the rest of the landlords with B & C class properties can only attract mom-and-pop shops at best!
and of course the best properties are snapped up by the huge REITs which use other People's Money to buy properties that are just way too expensive for the average investor to buy and even if they could buy it, the average investor doesn't want to look at anything that does not bring a satisfactory return! On the other hand the REITs really don't care if the property makes or loses money because it's not their money to begin with! If they win they win big if they lose they lose big but they still get the management contract for the property anyway so there's still bringing in some cash even if the investment doesn't look so good.
