What to do if I have a warehouse space that I have a leasefor but my business has shrunk and I cannot afford to pay on the space?

UPDATED: Aug 14, 2011

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What to do if I have a warehouse space that I have a leasefor but my business has shrunk and I cannot afford to pay on the space?

2 years ago I extended our lease on a warehouse space in Brandon. The economy went south and we were forced to relocate the business to our house. I have the lease for another 3 years and I cannot afford to pay the rent on the unit as of now. What are my options in such a matter? I know people walk away from mortgages all the time, but I’m not sure if this is the same thing or not. I found a sublease tenant for 6 months that just expired and have not been able to find another one since.

Asked on August 14, 2011 Florida

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you personlly signed this lease for the warehouse as opposed to signing the lease with the landlord on behalf of a corporation or limited liability company that you own, you are personally responsible for the blance of this commercail lease.

Even if this commercial lease is with a corporation or limited liability company that you own and the landlord, but you signed a personal guaranty for this lease, you are personally liable for the balance of this lease as well.

Unfortunately due to business conditions you cannot afford this lease. Your options are to sublease the warehouse for the balance of its term and hope that the sub-tenant keeps current or have a meeting with the landlord about your situation and hope that he has some knowledge of possible sub-tenants for the space.

Potentially the landlord may shorten the term of the lease with you as well, but this is unlikely in the business world. If you are unable to keep curent on the warehouse lease, the landlord may serve you with an eviction notice, evict you and sue you for the balance of the lease's term.

Once you vacate the warehouse, the landlord has an obligation to mitigate his or her damages by trying to re-lease the space.

 


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