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  1. #1
    Join Date
    Aug 2010
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    1

    Default Commercial Lease, Landlord in Foreclosure

    My question involves business law in the state of: Michigan, I purchased a retail business in march of this year. I recently found out my landlord has been in default of his mortgage since January. The building is going to sheriff's sale very soon and we would like to close the business.

    I know our lease personally guarantees me as well as assigned the lease to the bank upon takeover.

    If I want to get out our landlord has been asking us for a few months should I try to make a deal with them or wait for the sale. The question is am I still stuck with the landlord until the 6 month redemption period is up or can I try to deal with the bank once the take it back at the sale.

    Thanks

  2. #2
    Join Date
    Sep 2005
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    98,846

    Default Re: Commercial Lease, Landlord in Foreclosure

    If your landlord releases you from the lease while he remains owner, that should hold even after foreclosure. Depending upon the full facts and contractual provisions between them, it may give the bank a cause of action against him.

    You can try dealing with the buyer after foreclosure, which will presumably be the bank. Unless and until the former owner redeems the property, the fact that he could potentially redeem it doesn't make him the landlord.

  3. #3
    Join Date
    Sep 2010
    Posts
    19,901

    Default Re: Commercial Lease, Landlord in Foreclosure

    If the mortgage predates your lease (it probably does), then your lease is wiped out by the foreclosure. Unless the bank takes title via a deed in lieu or something like that, it's unlikely you'll have a lease at all after the sale.

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