What to do if our commercial lease up in 3 months but the building was sold and the new landlord wants us to vacate despite our renewal option?

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What to do if our commercial lease up in 3 months but the building was sold and the new landlord wants us to vacate despite our renewal option?

We are a small company that leases commercial space in a business park. Our lease is up shortly but we have an option to renew. The landlord recently sold the building to a a large regional property management company. We signed an estoppel agreement prior to the sale and the estoppel agreement includes our option to renew. Today we received a notice to vacate the space when the lease is up. They want to use our space to set up offices for their company. Can we be evicted even with our option of renewal?

Asked on February 3, 2012 under Real Estate Law, Maryland

Answers:

Joseph Gasparrini

Answered 9 years ago | Contributor

If an option to renew or extend the term is a valid provision of your lease, then the mere fact that the building has new ownership will neither void your option nor prevent you from exercising it.  Of course, when dealing with a commercial lease it is important to carefully review the entire document plus any additional agreements such as the Estoppel Certificate that you mention was signed in connection with the sale of the building.  In this situation, you or your lawyer should respond to the landlord's demand that you vacate the premises with a letter stating that under the terms of the lease you have an option to renew, which you intend to exercise at the appropriate time.  It may be advisable to actually give the required notice to exercise the option right away.  That may help to counter a possible claim by the landlord that you failed to exercise the option in a timely manner.  Since commercial leases and the surrounding circumstances raise many legal issues, and because a suit for eviction could put your business at serious risk, you should consult a lawyer who has expertise in commercial leases and related issues.


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