Leased Property May Be Under Foreclosure
My question involves business law in the state of: North Carolina
Hello!
I have a deli in a shopping center. The owners are in the process of a divorce, and the tenants, including myself, are suffering consequences. The landlord who is supposedly the managing partner owns a boutique in the same shopping center and her husband now lives in one of the apartments upstairs.
It states in my lease that grounds maintenance and exterior walls and roofs are the landlord's responsibility. No lawn care was being provided at all and the apartment upstairs has a shower that leaks every time the tenant takes a shower. The leak would drip on a table outside of the restaurant considered "deli space." Both landlord's would refer me to each other to rectify the situation. After going back and forth a couple of times I sent certified letters to both of them reiterating my concerns and our conversations. At this time those two issues are taken care of. This occurred last month.
Now the electricity for the shopping center has been cut off due to non payment of their bill. We have no security lights, flood lights on the entrance way or signs, no outside outlet power, or lights or hot water in the bathroom. This happened Thursday of last week and has still not been fixed. I spoke with the landlord Thursday evening, she said she would pay the bill on Friday. I spoke with the electric company today (Monday) who claims that the boot was removed, but still no power.
The husband came by today (Monday) to tell tenants that his wife was using our rent checks for personal expenses. He also stated that the mortgage had not been paid and the place was in danger of foreclosure. He claims that if we give him the rent checks that he will make sure things get taken care of, but in our lease it states that we must make checks to (shopping center name), LLC.
What will happen if the center does fall into foreclosure? What would happen if I didn't pay my rent? I am deeply concerned about the future of my own business.
Re: Leased Property May Be Under Foreclosure
I suggest that you (and the other tenants) start looking for alternate premises, even if as a 'just in case'. It's quite possible that things will continue to be like this (or get worse) until the landlords get into a financial situation where they can't get the power back on or end up in foreclosure. It sounds like you need to be proactive.
If your lease is with the LLC and rent payments are to be made to the LLC, you can run into problems if you make out your checks to one of the owners of the LLC who then diverts the money to his (or her) own use. If Mr. Landlord wants to collect the rent personally, and that's not inconsisent with the lease... that doesn't seem like a big deal. But if he's saying "Make the check out to me, personally - Mr. Landlord - not 'Shopping Center, LLC' like it says in the lease", I would be very wary that he's planning to divert the money and that you could find yourself subject to a claim for unpaid rent by the LLC.
Re: Leased Property May Be Under Foreclosure
Ditto. Do not pay the rent to the individual. The legal landlord can and probably will claim the rent is unpaid. (I would rather go to the electric company myself and pay the electric bill, and then deduct it from the rent. They won't like it, but at least you will be able to operate your business.)
The rent should be prorated for every day there is no power. You can't operate a business without power. That makes the premises legally unusable, or if housing, uninhabitable.
Personally, I would not pay anymore rent. This situation is only going to get much worse before it gets better. I would immediately find new space. There is so much empty retail space, especially in small strip malls, that finding an attractive and economic space should not be difficult. I do realize the down side of that of course.
Either that, or sit down with both of them and explain that regardless of their personal situations, they owe the tenants certain duties and if they don't act professionally and responsibly they will both end up with nothing but an empty rundown property with no real value in this market. Retail space without tenants and stable leases is virtually worthless.
Of course, the last idea may be too late if the property is anywhere near foreclosure. I personally would do a little research and find out exactly what is going on.