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  #1  
Old 06-26-2007, 04:40 PM
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Commercial RE Question

Buying a business.

PO leases the bdlg and I will sublet. Do I need to pay for the security deposit? Currently he has one month's rent down, 2 years remain on the lease.

The PO will be staying on-board, so things need to remain friendly.

TIA
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  #2  
Old 06-26-2007, 08:44 PM
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The terms are strictly between you and the PO. If he forgives the security deposit from you, he's still on the hook with the actual owner.

Most situations would call for you to provide the security deposit to insulate him against the loss. However, everything is negotiable.
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  #3  
Old 06-26-2007, 08:48 PM
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Thanks Brian,

That was the way I understood it, but wanted some more input.
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'17 Subaru WRX STI
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'13 Orbea Carpe 9-speed

Currently Benzless
Formerly: 300TD, S600, E55, 560SEL

---= The forest breathes, listen.
-Native American elder
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  #4  
Old 06-26-2007, 09:01 PM
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Make sure the leasee has legal contractual ability to sub-lease. In most cases they can but need the written permission from the leasor per the lease agreement.

Last edited by Medmech; 06-26-2007 at 09:08 PM.
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  #5  
Old 06-26-2007, 09:26 PM
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Thanks MM,

The sub-agreement will be in the leasee's hands before the closing.
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'17 Subaru WRX STI
'13 Subaru Outback 3.6R
'13 Orbea Carpe 9-speed

Currently Benzless
Formerly: 300TD, S600, E55, 560SEL

---= The forest breathes, listen.
-Native American elder
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  #6  
Old 06-26-2007, 09:32 PM
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Quote:
Originally Posted by The Swede View Post
Thanks MM,

The sub-agreement will be in the leasee's hands before the closing.
you mean the Lessor (owner) right?

disclaimer: my new auto spell check is having problems with RE lingo.
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  #7  
Old 06-26-2007, 09:40 PM
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Quote:
Originally Posted by Howitzer View Post
you mean the Lessor (owner) right?

disclaimer: my new auto spell check is having problems with RE lingo.
Yep, owner. Lessor, leaser, laser, loser, lazer
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'17 Subaru WRX STI
'13 Subaru Outback 3.6R
'13 Orbea Carpe 9-speed

Currently Benzless
Formerly: 300TD, S600, E55, 560SEL

---= The forest breathes, listen.
-Native American elder
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  #8  
Old 06-27-2007, 06:00 AM
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Quote:
Originally Posted by The Swede View Post
The sub-agreement will be in the leasee's hands before the closing.
Be careful. If the lease requires the lessor's consent to the sublease, make sure that it is given in writing... " hereby consents to the sub-lease of the demised premises by TS."

Also get an estoppel certificate from the Lessor that all rent is paid, the prime lease is not in default and Lessor does not have any claims against Lessee.

Are you permitted to pay rent directly to Lessor, or do you pay Lessee and he pays Lessor?

If the latter, and Lessee does not pay, will you get notices of default and the right to cure? Does your sublease give you the same right?

There are a number of wrinkles. An hour or 2 of a real estate lawyer's time could be worthwhile.
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  #9  
Old 06-27-2007, 06:49 AM
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It seems to be covered in the previous remarks. I agree with all of them.

Tom W
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  #10  
Old 06-27-2007, 07:54 AM
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Thanks for the advice Al.
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'17 Subaru WRX STI
'13 Subaru Outback 3.6R
'13 Orbea Carpe 9-speed

Currently Benzless
Formerly: 300TD, S600, E55, 560SEL

---= The forest breathes, listen.
-Native American elder
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