KellyMorgin Posted 3 Aug 2013 , 1:25pm
post #1 of

AFound a office nice area comes with signage, met manager he said he would like a deposit then we can worry about lease later on. I told him I will have enough money for deposit and first months rent. He said okay I will give you the keys and we can write up the lease over the weekend. Idk about you guys but if I'm paying everything I want my lease right then and there! I google the address and find out the building is up for sale and there's 2 years left on lease. Am I paranoid? What happends if I do get a lease and this is not a scam when the new owners buy it they have all rights to boot me out correct?

45 replies
reginaherrin Posted 3 Aug 2013 , 1:35pm
post #2 of

I don't know exactly about this but I hope you did not give me any money without that lease. 

KellyMorgin Posted 3 Aug 2013 , 1:48pm
post #3 of

ANot yet I'm meeting with him Tuesday, he said for me to pay I will get the keys then he will write up a lease over the weekend. If i decide to go with this and have a written and signed contract that he WILL give me the lease how well would that hold up in court if he takes my deposit and first months rent.

reginaherrin Posted 3 Aug 2013 , 1:55pm
post #4 of

Good. I am not sure if it would hold up or not but let me ask a lawyer I know and will let you know what they say.  Did the manager show you inside and give you all the details of the space?  Is this a shopping center building with other tenants?  If there is other tenants I would go talk to them and I would also ask the manager about the building being up for sale and see what he says.  I would also tell him that you will not be handing over any money without the lease and fully reading the lease. 

KellyMorgin Posted 3 Aug 2013 , 2:30pm
post #5 of

AThis is his email,

My policy is, deposit down first, then I write the lease. You will have time to share the lease with your girlfriend before you sign. I have prepared leases in advance too many times to then have a potential tenant not show up. Coming up with the money to do the lease is sometimes the hardest part.

Hope you understand.

Yes its a shopping center mall, there are 14 other tenants I am sharing a space with a woman's group that's only there 2 hours a week. I saw the kitchen bathroom and office. He said I can put up a shelf for my display cakes and that will be my corner. Its only 120 a month plus 20 for cleaning and I can upgrade to a office space just for me for 350. All I want is a lease its getting to be such a hassle!

KellyMorgin Posted 3 Aug 2013 , 2:36pm
post #6 of

AHis response to me asking about something he wrote in his for sale ad.

Hi

Good question.

Anyone buying this office building would do so because its filled with tenants not because they want to cancel leases. The clause is in every lease so that if I sell the building to a buyer who needs an office space they can find one that works in the building. Chances of your office space being the one they would pick to occupy is extremely low.

Keep in mind we have 14 offices and again, a buyer would be someone like myself looking to keep tenants and thus cash flow. Like with all my buildings, I've had this one for sale since the day I bought it.

Hope this helps. You would be a great addition to the mix of tenants.

KellyMorgin Posted 3 Aug 2013 , 3:52pm
post #7 of

AFinal email before I choose what I should do, I would really appreciate some advice.

(His email)

You can pay the deposit, then I could email you the lease to review, and then we can meet to sign the lease and collect rent. Given that we would be meeting at 5:15pm Tue, lease signing would not happen until Wed.

mashy Posted 3 Aug 2013 , 4:00pm
post #8 of

I'd be worried about a deposit before seeing the lease.  Is the deposit refundable if you can't come to an agreement on the lease?

Dr_Hfuhruhurr Posted 3 Aug 2013 , 4:07pm
post #9 of

AA couple of things that stand out to me:

1) Sounds like there is a clause in his leases that allow for termination of the lease in the event the building is sold (by the new owner). I don't deal with commercial leases, so I don't know how common such a clause is. But, it raises some questions. What compensation do you receive, by contract, if the lease is terminated early? How much notice is required for such a termination? How much time before you must vacate?

You need to know the answers to these questions before you sign the lease. Also, you need to consider the most important question--is the space really worth the risk, and are you okay with moving again if you need to? A termination clause like that might not be unreasonable, but if you know at the outset that the building is up for sale, you need to be comfortable with the risk.

2) It's unusual that he needs the money from your deposit to draft the lease. If he has a multi-unit building with lots of tenants, one would presume he has a form lease already available. If not, he may need an attorney to draft the lease, but most attorneys are not cash-up-front businesses. I'm not saying he's being dishonest, but it sounds odd to me.

You also had a couple of specific questions:

1) "If the building is sold, does the new owner have the right to boot me out?" Depends on your lease agreement. Absent a termination clause, the new owner can't boot you out. If you have a signed lease, you have a leasehold interest in the property. If the landlord sells the property, he does so subject to your existing interest. He can't transfer greater rights in the property than he has himself.

2) "If I pay the landlord a deposit in exchange for his agreement to give me a lease later, will that hold up in court?" Yes. It's sort of an 'agreement to agree,' and your deposit would make it binding. It's a perfectly valid contract, and not uncommon. In that real estate context, think of earnest money deposits for home purchases, as an example. Or option contracts.

BatterUpCake Posted 3 Aug 2013 , 4:30pm

He is correct that most buyers of commercial buildings do not kick people out. It costs them money to find new renters. But did you say $120/mo for rent? Is he renting you the janitors closet? I would check other commercial buildings in similiar areas and see what their monthly leases are because that just sounds supicious. I can understand him wanting a good faith fee before drawing up the lease, especially if he has to have an attorney do it. They make you do it when you buy a house so they don't waste their time and the tenant/buyer is just some flake that goes dream shopping and pulls out after they invested time. Just like if you sell a cake and ask for a deposit. That is to cover your time and expenses in case the buyer backs out. I would also talk to other tenants and find out if he is a good landlord, are there rumors of any serious potential buyers...and lastly consult with your own lawyer to go over the lease.

jason_kraft Posted 3 Aug 2013 , 4:30pm

ADo not hand over any money until you sign the lease, or at least have the agreement to agree mentioned above that lets you back out if you don't like the lease. If you can't get the lease in advance and this is a major investment, the lease should also have a 3-day cancel period so you can have your attorney look it over.

MimiFix Posted 3 Aug 2013 , 4:36pm

You need to ask a lawyer. CC is not the place to get legal advice. All we have are opinions and mine is: I would not touch this without talking with my attorney. 

Godot Posted 3 Aug 2013 , 4:43pm

ASheesh- I wouldn't touch this at all! Keep looking.

mashy Posted 3 Aug 2013 , 4:47pm
Quote:
Originally Posted by BatterUpCake 

He is correct that most buyers of commercial buildings do not kick people out. It costs them money to find new renters. But did you say $120/mo for rent? Is he renting you the janitors closet? I would check other commercial buildings in similiar areas and see what their monthly leases are because that just sounds supicious. I can understand him wanting a good faith fee before drawing up the lease, especially if he has to have an attorney do it. They make you do it when you buy a house so they don't waste their time and the tenant/buyer is just some flake that goes dream shopping and pulls out after they invested time. Just like if you sell a cake and ask for a deposit. That is to cover your time and expenses in case the buyer backs out. I would also talk to other tenants and find out if he is a good landlord, are there rumors of any serious potential buyers...and lastly consult with your own lawyer to go over the lease.

 

Generally though, the deposit in these cases is paid at the time of signing the lease/contract.  At that point the deposit is no longer refundable.  But paying the deposit before even looking at the terms of the lease just sounds really really suspicious to me.  I would think that this guy, owning a commercial building, has generic leases on file with sections to quickly fill out specifics for each business.  Especially since it sounds like he owns multiple commercial spaces.

 

Like other people have stated, talking to your own attorney would probably be in your best interests.  I'd even start looking for another property, this guy sounds like a handful.

BatterUpCake Posted 3 Aug 2013 , 4:52pm

Oh...I would not give the whole deposit...although how much could it be at $120 rent. But after doing more investigating I would give a good faith payment or even put the deposit in escrow so they would know I was serious. I am not saying what the OP should do. Just what I would do.

sixinarow Posted 3 Aug 2013 , 4:58pm

I agree with MimiFix..talk with an attorney.

My dad is an attorney, so I asked him about your situation, his take was as follows:

 

There is no reason that he wouldn't give you a copy of the lease before your deposit so you can have it looked over by your attorney. He shouldn't need to draw up a separate lease agreement for each tenant, he should have a generic lease that has blanks that he types in details as needed for each tenant..but the lease he should already have made up and in a file. Much like our contracts for cake clients, same contract with details for each order added. You pay an attorney once to draw up a lease and then keep it in your files to use as many times as you need for as long as you need. If you decide to do it, make sure you get your deposit back IN FULL if you decide not to lease after looking over the lease agreement. 

 

 Raises flags if he doesn't want to give you a lease to be looked over with your attorney before payment, especially since he has several spaces still available for rent and doesn't have a waiting list of tenants to rent them.

I don't know if I would want to work with someone being as dodgy as this guy...

HTH

KellyMorgin Posted 3 Aug 2013 , 7:11pm

A

Original message sent by BatterUpCake

He is correct that most buyers of commercial buildings do not kick people out. It costs them money to find new renters. But did you say $120/mo for rent? Is he renting you the janitors closet? I would check other commercial buildings in similiar areas and see what their monthly leases are because that just sounds supicious. I can understand him wanting a good faith fee before drawing up the lease, especially if he has to have an attorney do it. They make you do it when you buy a house so they don't waste their time and the tenant/buyer is just some flake that goes dream shopping and pulls out after they invested time. Just like if you sell a cake and ask for a deposit. That is to cover your time and expenses in case the buyer backs out. I would also talk to other tenants and find out if he is a good landlord, are there rumors of any serious potential buyers...and lastly consult with your own lawyer to go over the lease.

Rent is 120 because I am sharing with a women's group, i will check with other tenants. The part i DONT understand is why can't he draw up a lease if I have all monies up front? He said he'd be emailing it anyways.

BatterUpCake Posted 3 Aug 2013 , 7:16pm

He CAN. He is choosing not to. The best thing I can tell you is after you talk to other tenants, if you decide it is even worth pursuing then talk to an attorney before laying down any money. I fit's all on the up and up, you can't beat the price...but if it's not in a busy area, if he is a jerk, if you won't be protected post-sale....then it's just not worth it. Don't let your heart's desire to get into a place where it overrides your head's common/business sense.

KellyMorgin Posted 3 Aug 2013 , 7:18pm

A

Original message sent by jason_kraft

Do not hand over any money until you sign the lease, or at least have the agreement to agree mentioned above that lets you back out if you don't like the lease. If you can't get the lease in advance and this is a major investment, the lease should also have a 3-day cancel period so you can have your attorney look it over.

Great I will take a look into a few things before proceeding with this.

MimiFix Posted 3 Aug 2013 , 7:21pm
Quote:
Originally Posted by MimiFix 

You need to ask a lawyer. CC is not the place to get legal advice. All we have are opinions and mine is: I would not touch this without talking with my attorney. 

 

Quote:
Originally Posted by KellyMorgin 


Rent is 120 because I am sharing with a women's group,  

 

Sharing space? How do you keep everything secured? Wait, don't answer that. I agree with MimiFix. If you are still considering this, you need a lawyer.

KellyMorgin Posted 3 Aug 2013 , 7:22pm

A

Original message sent by sixinarow

I agree with MimiFix..talk with an attorney. My dad is an attorney, so I asked him about your situation, his take was as follows:

There is no reason that he wouldn't give you a copy of the lease before your deposit so you can have it looked over by your attorney. He shouldn't need to draw up a separate lease agreement for each tenant, he should have a generic lease that has blanks that he types in details as needed for each tenant..but the lease he should already have made up and in a file. Much like our contracts for cake clients, same contract with details for each order added. You pay an attorney once to draw up a lease and then keep it in your files to use as many times as you need for as long as you need. If you decide to do it, make sure you get your deposit back IN FULL if you decide not to lease after looking over the lease agreement. 

 Raises flags if he doesn't want to give you a lease to be looked over with your attorney before payment, especially since he has several spaces still available for rent and doesn't have a waiting list of tenants to rent them. I don't know if I would want to work with someone being as dodgy as this guy... HTH

Thanks very much! I will see what he has to say after I mention most of the above ie deposit back in FULL. You guys are fantastic!

KellyMorgin Posted 3 Aug 2013 , 7:33pm

A

Original message sent by MimiFix

[SIZE=14px]Sharing space? How do you keep everything secured? Wait, don't answer that. I agree with MimiFix. If you are still considering this, you need a lawyer.[/SIZE]

When I first spoke with him he said he had a very tiny office for 120. I got to the meeting and the said he thought a bigger shared space would meet my needs because I am just holding consultations there. I told him I would be doing a little more then that. He showed me the smaller office and I agreed it would not fit my needs, you could only fit a chair in the lol. He gave me the hours that the women's group would be there. Showed me around and also said I can get a corner in the room and a locked desk my corner will have my cakes to display. He also showed me a room in which was bigger then the small office and would be all mine. But the price was a bit higher so I said sharing a space for now would do. This office is just across the street from my house and 1 block from the rented kitchen sounds ideal to me! Gosh it would suck if this is a great opportunity if I pass it up.

KellyMorgin Posted 3 Aug 2013 , 7:50pm

ASaid he can't send a generic lease because everyone is on the same lease and he would have to delete everyones information. He said I would get the deposit back.

MimiFix Posted 3 Aug 2013 , 8:03pm

Oh. please. Every tenant has their own lease. The guy is shady. Listen to Godot and run run run.

reginaherrin Posted 3 Aug 2013 , 9:11pm

So I just talked to my mom who is a lawyer and this is right up her alley.  She say, first, do not give your deposit before you see the lease.  If he owns this building and possibly more he should have a standard lease agreement and not have to make a new one each time.  She said that if you give him the deposit he would have to owe you something, in this case the lease, but if you don't sign it then there is no guarantee that you will get the money back (regardless of what he says).  In which case to get your money back you would have to take him to small claims court.  She also says not to worry about the building being sold, it happens all the time and the new owner would just buy the leases along with the building and nothing can change until the lease is up (of course at which time you would have to sign a new one with the new owners and it would be different from your old one).  So if he is unwilling to show you the lease at the time you would put your deposit down then I would not sign and find another building.  It just really doesn't make sense that he would not have you come in to sign the lease and put your deposit down at the same time.  If you go to most realtors websites they have there lease agreements on their site so why would he not want to show you the lease. 

DeliciousDesserts Posted 3 Aug 2013 , 11:28pm

ARun. Do not walk. Run.

LoveMeSomeCake615 Posted 4 Aug 2013 , 1:00am

Yeah, this sounds really weird. Everyone is on the same lease?? That makes no sense.

 

When we were looking at our space, they emailed us a copy of the lease so that we could look over it as much as we needed to, and then when we met to finalize things, we signed the lease and paid the deposit at the same time. This is standard procedure. 

jason_kraft Posted 4 Aug 2013 , 4:47am

AIf all tenants are on the same lease and the contract indicates that each tenant is jointly and severally liable (it wouldn't surprise me, and it would explain why he doesn't want to show you the lease), that means the landlord could go after any individual tenant for the liabilities of every tenant. Any tenant who would sign such a contract is nuts.

That's if he's even telling the truth about all tenants sharing the same contract...any revision of the contract (e.g. adding a new tenant) would not be valid unless all parties to the contract (e.g. all tenants) agree to it.

Pyro Posted 4 Aug 2013 , 5:30am

If you are really torn about getting the place, you can try to protect yourself:

 

1- Write him a check. put the date on it to the day AFTER he's supposed to hand you a lease. That way, when ever he says he will provide you with the lease, he can cash the check the next day. He gets a valid check, you get a lease. If he doesn't show up with a lease, call your bank and have them stop the check. Make sure you write something in the notes like " first month rent and deposit " or whatnot.

 

2- Write some kind of promissory note/letter, have your full name and address in there then leave space for you to write his full name, address and place of business. -That he must provide you with a lease to look over by a specific date.

-That all money paid is fully refundable if you reject the lease agreement ( if it's the agreement ).

-Make sure it says in there you are providing him a check for security deposit ( which is what I'm guessing the deposit is ) and first month rent .

-Write  the deposit amount, 120$ for first month rent for total amount  XYZ.

-Add whatever else seems necessary.

 

Have everyone sign it, your gf can sign as a witness.

 

If his legitimate, he shouldn't get annoyed or refuse to sign it. It only makes him liable to provide you a lease that you have to agree to to keep the cash on hand.

 

That should be enough to go to court if something goes wrong, but chances are most people won't for 120'ish dollars.

 

As a side note, I don't understand why " everyone " would be on the lease if you are only really sharing with 1 person ( woman group ). Also, no one will be accountable when you show up one day with the fondant on a dummy cake all messed up from random people poking it or deciding to " see what it tastes like ".

Smallfrye Posted 4 Aug 2013 , 6:11am

Have you spoken to the womens group yet? If they are already renting this space, you could just ask them if you could use it when they are not in there. It sounds strange that the space is already rented and he's trying to get more rent from you. The extra money you pay should go to the group that is already paying the full rent for the space, right? And if he is going to add your name to their lease they have to re-sign it as well. I was in a situation kind of like this and the person I was renting from was not the owner of the building. Luckly I got out of that situation as fast as I could. Dont get yourself in the same situation. It turns into a mess.

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