Commercial Lease - Tenant wants to be removed.

Discussion in 'Property Management' started by sparklestorm, 28th Aug, 2019.

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  1. sparklestorm

    sparklestorm Well-Known Member

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    Greetings friends,

    I am currently managing a commercial property and have just received a call from one of the tenants on the lease that they no longer wish to be apart of it. Whatever the circumstances may be, the partnership between both parties has now come to a nasty end.

    Can anyone guide me in the right direction as to how to go about this situation?

    This is my first encounter with such a matter and have really no idea how to handle it.

    Thank you all in advance for your input
     
  2. TMNT

    TMNT Well-Known Member

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    are you self managing?
     
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  3. sparklestorm

    sparklestorm Well-Known Member

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    No, property I am managing for someone else. I specialise in residential but this one if for a family member so it kind of fell in to my lap.
     
  4. MRO

    MRO Well-Known Member

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    You are potentially giving away security. What security will be provided in its place? What term is left on the lease? This is there problem to resolve not yours so maybe they can put forward a suggestion.
     
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  5. Perp

    Perp Well-Known Member

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    Firstly, you'll have to read your lease. Commercial leases aren't 'standard' like residential leases, and there may be relevant clauses in there.

    Secondly, check if the lease comes under the retail tenancies legislation in your state, and if so, check what that legislation says (if anything) about this situation.

    Failing anything specific in the above two, the tenant is asking to be released from their obligations under the lease. There's no general obligation to allow them to be released, certainly without consideration, which might be an increased bank guarantee for the remaining tenant, or payment of some consideration by the departing tenant to recognise that the chances of breach are now increased.
     
  6. Shady

    Shady Well-Known Member

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    Sent you a PM
     
  7. D.T.

    D.T. Specialist Property Manager Business Member

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    You could do a deed of assignment to 'assign' the lease from its current names to the proposed names. I recently did this with the office my agency leases.

    I think you would want to do a serviceability & security check on remaining tenant first.
     
  8. Michael Mitchell

    Michael Mitchell Well-Known Member

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    Depending on complexity, the answer may be lawyer.
     
  9. Scott No Mates

    Scott No Mates Well-Known Member

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    Shady likes this.

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