Am I legally bound to a least rent payment if Im not on the lease?

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Am I legally bound to a least rent payment if Im not on the lease?

In October 2018, our friend contacted my husband and I to ask us to buy her failing business from her. She was unable to pay her rent and was in a dire financial situation. She owned a company called Inform LLC that rented out rooms to a few massage therapists. My husband and I had the idea that the business would function better and become profitable if it was turned into a shared space. Together we entered into a handshake agreement business partnership 33% split for each of us 3 in exchange for us to rebrand the company – new name, business plan, logo, web design, location remodel, etcall of which we were the sole investors in. Our business was called The Unity Studio and was a co-working collaborative membership-based wellness studio for entrepreneurs to run their business from. Essentially they paid to rent our studio and book private time on our shared calendar. We had nothing in legal writing of this partnership no contract of this agreement and her name was not on our LLC or our business license. We had a business account that we all shared and I managed. I did 80 of the day to day business operations. Due to her moving to another city, our partner decided to remove herself from partnership in April 2019 we have an email from her stating this. We were not a profitable business yet, just breaking even on bills at the time that we separated. Due to this, we all verbally agreed on how to finish the final expenses and who would take what. We also found out the that location we were doing business in was not allowed to have a business as per her lease agreement. Our partner was the only one listed on that lease and the landlord was not aware that a business was being run on his property. Since he chose not to allow my husband and I to sign a lease with him. We were told by our partner that wed have to have all of our belongings out by May 31st. I paid for the rent out of our business account from payment from memberships through April 30th. Our partner chose to stay in the space she says the landlord gave an extension of a month to stay, although this was never told to us by him. We also paid for $500 of the $680 damage charges from the landlord and are prepared to pay the final $1200 that is the monthly rent payment due for the month of May. She stayed in the location without us for the month of June and is requesting that we also pay for that month. We are unsure of what our rights and responsibilities are in this situation.

Asked on July 16, 2019 under Business Law, New Mexico

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

As with any other contract, only the person who is listed on the agreement is bound by its terms. Accordingly, since your partner and not you is the one listed, only there are obligated to pay rent.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

A lease is a contract; as with any other contract, only those who are parties to (i.e. who are on or who signed) the lease are bound or obligated under it. Your write that your partner was the only listed on the agreement; therefore, she is only one obligated to pay the rent.


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