St Louis Business Repair Questions

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St Louis Business Repair Questions

Hello, Im sort of in a dilemma. I recently bought a business from someone, so I
do not have a new lease on the building. It turned out the before owner did
something with the heat making the sprinkling system burst. Basically the old
owner threw me under the bus. Now the landlord is giving me three options. 1. I
move out. 2. I sign up a new lease with added 100 to cover repairs 3. I get an
attorney to make the old owner pay for repairs. Now my question is which option
should I go with? My trouble is that why should I be responsible for paying for
the repairs? Isnt it by law that the landlord or the one that did the damage pay
for the repairs?

Asked on March 13, 2017 under Real Estate Law, Missouri

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

The landlord is not responsible for damage done by a tenant: the tenant is responsible.
As to whether the old owner or you is responsible, it depends on the following: was the business an LLC or corporation and, if so, did you purchase the LLC or corporation? If you did, then you--or more properly, the business--are liable for it, because the tenant was not the prior owner or you, but the LLC or corporation, and that LLC or corporation is still liable for the damage it did as a tenant to the landlord's property. The fact that you now own the LLC or corporation does not change the LLC's or corporation's liability; therefore, the landlord could come after business (the LLC or corporation) for this. (Note that you may be able to sue the former owner for fraud, for hiding a major cost or liability from you, to recover amounts that you or your business have to now pay out).
On the other hand--
* If the business that had been renting/leasing had been an LLC or corporation, but you did not buy the actual LLC or corporation (you just bought the assets: e.g. name, goodwill, equipment, inventory, accounts receivable, customer list, etc.), then you are not liable: the LLC or corporation, which is a separate legal person, is still liable for its own debts, and the landlord could try to sue it.
* If the business had been a sole proprietorship before you took it over or bought its assets, then the former proprietor--that former owner--is liable for any damage he did; the landlord can go after him, not you or your business.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

The landlord is not responsible for damage done by a tenant: the tenant is responsible.
As to whether the old owner or you is responsible, it depends on the following: was the business an LLC or corporation and, if so, did you purchase the LLC or corporation? If you did, then you--or more properly, the business--are liable for it, because the tenant was not the prior owner or you, but the LLC or corporation, and that LLC or corporation is still liable for the damage it did as a tenant to the landlord's property. The fact that you now own the LLC or corporation does not change the LLC's or corporation's liability; therefore, the landlord could come after business (the LLC or corporation) for this. (Note that you may be able to sue the former owner for fraud, for hiding a major cost or liability from you, to recover amounts that you or your business have to now pay out).
On the other hand--
* If the business that had been renting/leasing had been an LLC or corporation, but you did not buy the actual LLC or corporation (you just bought the assets: e.g. name, goodwill, equipment, inventory, accounts receivable, customer list, etc.), then you are not liable: the LLC or corporation, which is a separate legal person, is still liable for its own debts, and the landlord could try to sue it.
* If the business had been a sole proprietorship before you took it over or bought its assets, then the former proprietor--that former owner--is liable for any damage he did; the landlord can go after him, not you or your business.


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