Commercial Real Estate Investment/Commercial Eviction

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QUESTION: Hello,

I am currently in a commercial lease where the owner of the property informed me the renter next to me wants to expand his business, therefore, he wants to relocate me.  However, the options for relocation is not equivalent to my current space.  It is not a storefront location; it is an office space.  I will loose my customer since a lot of my customers are from walking by my store.  In addition, the space is significantly smaller than the current space I occupy.  I was told that if I don't accept the relocation, then I have broken my agreement and will be evicted within the next 30 days.  Please help me.  Can I file an injunction or file a temporary restraining order against my landlord so that I won't get locked out my store?

Thank you in advance....

ANSWER: Pamela:

As long as you pay your rent payments on time and meet all of the terms of your lease, you have the legal right to remain in your current premises until the expiration date of your current lease term - - unless your lease has some form of explicit written provision that allows your landlord to relocate your lease premises before your lease expires.

When does your lease term expire?  Unless you are a month-to-month tenant (you occupy your space without a binding lease for 30 days at a time as long as you pay the rent stipulated by the landlord and the landlord does not give you formal legal notice that it is taking your premises back) you cannot be relocated until the expiration date of your lease.  

A "relocation clause" is a written provision found somewhere in your lease that states that the landlord has the right to relocate your business and provides details - again in writing - of specific terms associated with the relocation.  A "Relocation Clause" is not commonly included in a lease, however, if there is such a clause in your lease I cannot imagine that you have overlooked it until now.  Read your lease carefully from start to finish to assure yourself that any related provision is not included somewhere in the "fine print".  

Ask your landlord specifically how you have "broken your agreement" and to please tell you the specific wording in the actual lease where this language can be found.   

As far as I know, in every area of the United States that I am familiar with a landlord is required to give you a minimum 30 day WRITTEN notice of its' intention to evict you and that notice must state the landlord's legal basis for doing so.  Have your gotten such a written notice delivered to your premises, put in your hand, taped to the front door of your premises, etc.?

Beware, I know of a landlord that wanted to have a tenant's space back so it could rent the space to someone else and the landlord tried to evict the tenant saying that the tenant had not given the landlord a photocopy of the tenant insurance coverage specified to be carried by the tenant on its' leased premises over the lease term.  The tenant responded by simply giving the landlord the required insurance document and - in this specific case - the landlord was unable to evict the tenant.  As I said above, be certain that you have met all the "terms" (such as providing the landlord with copies of lease stipulated insurance certificates) required in your lease.   

Something of importance must be missing in your explanation of your situation.   I cannot believe that a landlord would be misguided enough to try to unlawfully evict a tenant.   

Since time seems to be getting short for you, you may wish to consult local legal counsel for assurance that you have solid legal basis for remaining in your premises since it sounds like your landlord either thinks it has the legal right to evict you or thinks that groundless intimidation will get you out of your current premises.  

Send me any further facts that you think would help me to understand this situation better.

Good luck.

-Jim  





---------- FOLLOW-UP ----------

QUESTION: Jim -

Thank you for your reply.  I forgot to mention that when I moved into my space  I spent about $60K in renovation to make the property conducive to my business.  I asked the landlord if they will provide  me with the $60K to prepare my space for my business and was told they would not and now they are trying to put me in a place that is smaller and not in a storefront location.  

There is a relocation clause and since this was new to me, I probably overlooked it.  I would be happy to forward a copy of it for your perusal.  

Pamela.

Answer
Pamela:

Since there is a relocation clause in your lease, you should get an attorney that specializes in landlord/tenant law to consult with regarding this matter ASAP.    Most of the provisions of relocation clauses are far to general and ambiguous - in my opinion - always leaving many potential issues open to legitimate dispute by both the landlord and tenant.   Your $60K in improvements is an interesting factor depending on the text of the relocation provision.  The world of relocation clauses and related resolution are sort of an out of place anachronism; i.e, the Wild West of commercial lease law.   

Do not be intimidated by communications from your landlord, you need to get OBJECTIVE legal advise immediately from an attorney.  It is critical that you find an attorney that is knowledgeable in landlord/tenant ("L & T") law.

Please send me a copy of your relocation clause, but do not wait a moment longer to track down legal representation by an L & T specialist.  I am not an attorney, and cannot give you legal advice.

Best of luck.

-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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