What to do if I am in the process of selling my business the new owner will have an assignment of the lease without my release of my lease?
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What to do if I am in the process of selling my business the new owner will have an assignment of the lease without my release of my lease?
This will make me liable for rent should he default. Could someone tell me what my rights are regarding this issue? Since I will be financing apportion of the sale, if he does default on the lease payment or repaying me back, can I reclaim the business back? The sale has not gone through and I’m afraid of the what ifs.
Asked on November 11, 2014 under Business Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
If you are not fully released from the lease (or if you guaranty the buyer's lease), you will be liable for any rent defaults or other amounts the buyer is liable for (e.g. if he physically damages the premises). You would have the right to sue the buyer to try to recover money from him if you are forced to pay due to his default--though of course, if he defaulted, he may have no money. You would not have the right to reclaim the business in the event of default unless there is an agreement (such as the agreement of sale) specifically stating that you would have that right.
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