If I am renegotiating a business lease and the property management firm is asking for my personal tax and financial information, is this legal and/or required?

Get Legal Help Today

 Secured with SHA-256 Encryption

If I am renegotiating a business lease and the property management firm is asking for my personal tax and financial information, is this legal and/or required?

Asked on May 19, 2012 under Real Estate Law, Utah

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Is it legal? Yes. A prospective landlord may request any documentation from its prospective tenants that it wants, including personal finances in regard to a commercial lease. Remember: they are not obligated to rent to you, and you are not obligated to rent from them--they can ask for any documenation they feel would be helpful, and you can walk away from this potential landlord if you don't like what they are asking.

Is it required? If this landlord wants it, it is required. They do not have to rent to you unless you satisfy them that you are a desirable tenant. If you don't comply with their requirements, they won't enter into a lease.

There are a number of reasons they may wish to see your financials, by the way:

1) If your business is sole proprietorship or partnership (not an LLC or corporation), you and the business are legally and financially the same, even if you don't personally see it that way.

2) For smaller, newer, or otherwise "riskier" businesses, a landlord often requires a personal guaranty from owners--they may need to review your financials to see if that is feasible or helpful.

3) If you are drawing excessive income from the business, that suggests that the business is not a good risk--you may be pulling out more money that it can support. Conversely, if the business can't afford to pay you a liveable salary, that suggests financial weakness.

Those are just a few reasons--many more exist.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption