What is a new owner’s liability for acts of a previous owner/tenant?
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What is a new owner’s liability for acts of a previous owner/tenant?
I am currently buying a company that might get sued for breaking their lease agreement at a building. Will I as new owner of the company have a problem or will they just go after the previous owners of the company?
Asked on December 20, 2011 under Real Estate Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you buy the corporate structure of the company--that is, you buy the corporation or LLC, and not simply purchase the company's assets (including name, goodwill, intellectual property, etc.)--you would be liable for its actions under the prior owner; or more accurately, the company will remain liable, since it is the same entity, but you personally should not be liable as owner, unless you guaranteed the debt. If you take assignment of the lease in question, if it were still in force--though it seems that it is not, from what you write, since it was breached--that could also make you liable.
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