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2 Replies Last post: Jan 13, 2009 4:43 PM by soniabella

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Need advice re: rent owed

Jan 13, 2009 3:05 PM

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soniabella 2 posts since
Jan 13, 2009

Hi everyone, this is my first post. I have a store and a few months ago I started falling behind on my rent. I'm now almost caught up and currently only owe December and this month (Jan). Also in December I decided to close and have told my landlord this when they came to the store to discuss late rent. My location that I have is not the best, not much pedestrian traffic. Everyone knows (other merchants & people around here) that my street is 'dead'. So with the economy plus bad location my business suffered terribly and this is why I am closing. So they told me that I need to pay Dec and Jan and I said that I would, however I've been advised and told by others not to pay the rent if I dont have the money, that my bills that I will still have after I close shop are also important and that I should use whatever money I have for that. So my question is: do I have to pay the last 2 months? They do have a 1 month's security deposit which I gave when I first signed my lease which was 2 years ago. Can I ask the landlord to use my security deposit for one month? The place looks 110% better than it did when i first got it, and they know this. In the floors alone I paid over 5K.

Also, I have 1 yr left on my lease, which I was told VERBALLY when I asked them what would happen if I wasnt doing well and had to close or leave? They told me that they wouldnt hold me to the lease. Again, this is what was said to me, however is not on the lease nor was it discussed in detail. So now what they're telling me is that there are terms involved in what they told me which is that they're not holding me to the lease but that as long as the spot remains vacant that I am responsible for the rent for those months. So if they find someone to take over the spot then they're holding me to it.

Sorry for long post, but need serious advice. I have placed ads for the space and have found someone seriously thinking about taking it but this is not definite. I have an attorney but I dont want to go to him because I cant afford fees like that right now. What can I do? If my business is suffering and I have no $ to pay should I still? What can I do?

thanks!

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Mogul

Lighthouse24 2,396 posts since
Oct 10, 2007

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1. Re: Need advice re: rent owed Jan 13, 2009 4:12 PM

Welcome to the community. I know that you are in a difficult position and very worried about the days ahead. Your landlord probably is, too. Even if they are "wealthy" by comparison, they have also financial pressures and obligations that have to be met, and they were probably counting on your rent to help meet them. So my advice would be as follows: First, keep in mind that you are not the only party in this situation with a problem.

Next, make an appointment to sit down face to face with them if possible (or to have a teleconference if they are in a different city) to discuss your lease payment. When you talk, acknowledge that you recognize their side of this dilemma, and explain that you really wish your business was thriving, that you were making a profit, paying rent on time, and even considering a longer term renewal for the future. Then be open and honest about your situation -- where you stand financially -- and propose a solution that would work for you, and that you believe would be fair and reasonable for them. They may accept the offer, or they may propose something else, but at least you'll be talking and working toward a better deal than the lease agreement spells out.

Whatever you agree to, put it in writing and ensure that all parties who were involved in the original lease agreement sign and date this as an amendment to those terms.

If you can't reach an agreement, and they seem determined to hold you to the written terms of the lease, don't try to "hide" or "run" -- instead, be proactive. Send regular, trackable communications to them in writing, updating them on your situation and outlining what you are trying to do to honor the payment terms. If you're doing that, it's less likely that this will become a legal matter (and even if it does, the court will see that you continued to act in good faith -- that you stayed in touch and would've paid them if you could've, but you couldn't). It's also less likely, if you keep communicating with them, that this will damage your reputation and credit as badly.

I hope everything works out for you. Good luck.

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soniabella 2 posts since
Jan 13, 2009

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2. Re: Need advice re: rent owed Jan 13, 2009 4:43 PM

in response to: Lighthouse24

Thanks so much for your great advice. Yes I agree with you. And the good thing is that I have been communicating with them so I am not running or hiding from them. Thanks again!

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