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Is it possible to sell a business with no lease?
My mom owns a deli. She is done. She wants to retire and relax. The building her business is in went into foreclosure years ago. It has been at least 3 years since she has paid rent. The man who owns 3 buildings close by is trying to buy the building. He will give her a lease. He said courts say it could take 2 more years. Now my question is, could she sell said business with no lease, to the right buyer?
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Posted 6/8/16 12:04 PM  |
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Long Island Weddings
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Eunyboo
<3
Member since 7/12 4376 total posts
Name:
E
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Re: Is it possible to sell a business with no lease?
I would think it would be hard because usually the biggest asset a company has is the building.. unless she sells off her customer list or some special recipe is making the business attractive to a buyer.. Where would the new buyer operate?
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| Posted 6/8/16 12:29 PM |
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mamaprox2
LIF Infant
Member since 6/15 90 total posts
Name:
Jennifer
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Is it possible to sell a business with no lease?
Can she rent it out ... like have them pay her rent and keep it in her name ?
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| Posted 6/8/16 12:31 PM |
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Re: Is it possible to sell a business with no lease?
Posted by mamaprox2
Can she rent it out ... like have them pay her rent and keep it in her name ?
We have thought about that but she needs a certain amount up front to pay off her debt.
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| Posted 6/8/16 12:39 PM |
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Re: Is it possible to sell a business with no lease?
Posted by Eunyboo
I would think it would be hard because usually the biggest asset a company has is the building.. unless she sells off her customer list or some special recipe is making the business attractive to a buyer.. Where would the new buyer operate?
In the same building. There is no lease, no landlord. She has been there for years with no lease or landlord.
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| Posted 6/8/16 12:40 PM |
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Eunyboo
<3
Member since 7/12 4376 total posts
Name:
E
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Re: Is it possible to sell a business with no lease?
Posted by myboysmyheart
Posted by Eunyboo
I would think it would be hard because usually the biggest asset a company has is the building.. unless she sells off her customer list or some special recipe is making the business attractive to a buyer.. Where would the new buyer operate?
In the same building. There is no lease, no landlord. She has been there for years with no lease or landlord.
So she owns it? If she does, then I'm sure she could find a buyer with no lease.
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| Posted 6/8/16 12:51 PM |
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Re: Is it possible to sell a business with no lease?
Posted by Eunyboo
Posted by myboysmyheart
Posted by Eunyboo
I would think it would be hard because usually the biggest asset a company has is the building.. unless she sells off her customer list or some special recipe is making the business attractive to a buyer.. Where would the new buyer operate?
In the same building. There is no lease, no landlord. She has been there for years with no lease or landlord.
So she owns it? If she does, then I'm sure she could find a buyer with no lease.
She owns the business in the building. Not the building. She wants to sell the business. A lot of businesses are renting building space. Then when they want to sell their business the lease gets transferred or renewed with new business owner. In her case there is no lease to renew or transfer.
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| Posted 6/8/16 1:07 PM |
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FTM427
LIF Adult
Member since 1/12 1261 total posts
Name:
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Is it possible to sell a business with no lease?
It seems it would be a risky purchase for a buyer to buy her business given the status of the building. I would think a new building owner could come in and say to the businesses in the building "well you owe us back rent since you havent paid in 3 years".
Message edited 6/8/2016 1:23:38 PM.
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| Posted 6/8/16 1:22 PM |
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WonderLady
LIF Infant
Member since 1/15 355 total posts
Name:
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Is it possible to sell a business with no lease?
Not an example of a good question for lif, lol.
But anyway, my answer would be no. Imo she has to ride it out until a new owner does come along and then sign her own (preferably shorter than typical business length) lease, assumable by a buyer.
If the building is in foreclosure then the new business owner would be like a squatter. When a lease gets assumed in a business sale, a landlord (usually their atty) takes steps to approve the assumption/ sub-lease. A bank owns the building now- it's not like it is just floating with no owner, kwim?
I guess you may find someone willing to just buy the name, the assets, and take a chance- but that person would be crazy.
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| Posted 6/8/16 6:19 PM |
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CSK
LIF Adolescent
Member since 9/11 892 total posts
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Re: Is it possible to sell a business with no lease?
Posted by WonderLady
Not an example of a good question for lif, lol.
But anyway, my answer would be no. Imo she has to ride it out until a new owner does come along and then sign her own (preferably shorter than typical business length) lease, assumable by a buyer.
If the building is in foreclosure then the new business owner would be like a squatter. When a lease gets assumed in a business sale, a landlord (usually their atty) takes steps to approve the assumption/ sub-lease. A bank owns the building now- it's not like it is just floating with no owner, kwim?
I guess you may find someone willing to just buy the name, the assets, and take a chance- but that person would be crazy.
ITA. Also, I'm not an attorney, but I definitely would want to check out what the responsibility for the back rent is. Technically the mother owes the rent to the owner of the building for the time she's in there. I'm not saying she won't get away with not paying that, but I think she technically owes the rent to the owner even if the mortgage wasn't being paid, then the bank, I'd be more worried about the bank.
I would think any buyer would be absolutely crazy to buy the business in its current state as they could be evicted at any point and possibly be responsible for 3 years of back rent.
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| Posted 6/9/16 9:40 AM |
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Re: Is it possible to sell a business with no lease?
Posted by CSK
Posted by WonderLady
Not an example of a good question for lif, lol.
But anyway, my answer would be no. Imo she has to ride it out until a new owner does come along and then sign her own (preferably shorter than typical business length) lease, assumable by a buyer.
If the building is in foreclosure then the new business owner would be like a squatter. When a lease gets assumed in a business sale, a landlord (usually their atty) takes steps to approve the assumption/ sub-lease. A bank owns the building now- it's not like it is just floating with no owner, kwim?
I guess you may find someone willing to just buy the name, the assets, and take a chance- but that person would be crazy.
ITA. Also, I'm not an attorney, but I definitely would want to check out what the responsibility for the back rent is. Technically the mother owes the rent to the owner of the building for the time she's in there. I'm not saying she won't get away with not paying that, but I think she technically owes the rent to the owner even if the mortgage wasn't being paid, then the bank, I'd be more worried about the bank.
I would think any buyer would be absolutely crazy to buy the business in its current state as they could be evicted at any point and po
ssibly be responsible for 3 years of back rent.
She has an attorney, and I spoke with a business broker. No one will be responsible for any back rent. She never owned the building. The landlord who owned the building stopped paying and disappeared. He owes the bank money, not her. She is basically a squatter. The bank wants her there though so the building does not remain vacant and unkempt.
I do agree it is a risky deal, we do have a lawyer and I now have a real estate broker. Thank you for everyone's help.
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| Posted 6/9/16 10:53 AM |
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CSK
LIF Adolescent
Member since 9/11 892 total posts
Name:
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Re: Is it possible to sell a business with no lease?
Posted by myboysmyheart
Posted by CSK
Posted by WonderLady
Not an example of a good question for lif, lol.
But anyway, my answer would be no. Imo she has to ride it out until a new owner does come along and then sign her own (preferably shorter than typical business length) lease, assumable by a buyer.
If the building is in foreclosure then the new business owner would be like a squatter. When a lease gets assumed in a business sale, a landlord (usually their atty) takes steps to approve the assumption/ sub-lease. A bank owns the building now- it's not like it is just floating with no owner, kwim?
I guess you may find someone willing to just buy the name, the assets, and take a chance- but that person would be crazy.
ITA. Also, I'm not an attorney, but I definitely would want to check out what the responsibility for the back rent is. Technically the mother owes the rent to the owner of the building for the time she's in there. I'm not saying she won't get away with not paying that, but I think she technically owes the rent to the owner even if the mortgage wasn't being paid, then the bank, I'd be more worried about the bank.
I would think any buyer would be absolutely crazy to buy the business in its current state as they could be evicted at any point and po
ssibly be responsible for 3 years of back rent.
She has an attorney, and I spoke with a business broker. No one will be responsible for any back rent. She never owned the building. The landlord who owned the building stopped paying and disappeared. He owes the bank money, not her. She is basically a squatter. The bank wants her there though so the building does not remain vacant and unkempt.
I do agree it is a risky deal, we do have a lawyer and I now have a real estate broker. Thank you for everyone's help.
I'm not implying she owned the building and owed the bank for that. What I am saying is that she had a lease at some point with the owner of the building. Whether he pays the bank or not, she owes the owner money under the lease. When the bank took possession of the building, the lease transferred to the bank and she would owe the bank under that lease for the rent. If he just sold the building to another landlord, the lease would transfer.
Whether they're going to collect under it is another matter. There are plenty of people who ended up not paying any rent in those conditions, but, she legally would still owe rent.
This is a discussion primarily related to residential, but might be relevant
http://www.dfs.ny.gov/consumer/tenantrights.htm
I'm assuming her attorney would have a better idea as to the landlord and tenant laws specific to this case.
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| Posted 6/9/16 1:58 PM |
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