Newsflash: Commercial Tenant Advice Needed!

Hello everyone! Had a little bit of a quandary that I could use some advice on. Deep breathe and here goes!I purchased a commercial building last august with retail space on the bottom and offices on 2nd and 3rd floors. I purchased the building back in August 2016 with 3 tenants already in place, and for this question I’ll be focusing on the problem tenant in one of the retail spaces.Basically this tenant took over the 1600 sq ft retail space back in July. After using up his 3 month free rent grace period (standard practice out in CT) he then reveals that he wasn’t aware that the space was that big, and only really needed 800 sq ft. At the time I was focused on keeping tenants in my early stages of ownership. Still, even after building him a wall and agreeing to rent out the half space instead he continued to be late in rent payments, and has generally been a huge pain in the ass – not picking up calls, making empty promises, etc.So I’ve finally reached my limit – it helps I have someone very interested in the entire 1600 sq ft space now – and have decided to move on from him, and here is where my dilemma comes. Basically a month ago he tells me he’s quitting the cell business and cannot rent the space anymore. At that point he owed me approximately $6500 in rent, or over 3 months behind. We came to an agreement that he would pay $3000 and we’d call it even. I wrote up a promissory note and termination agreement and sent it over to him. A week or two goes by and it’s the beginning of May and he calls me to inform me that the cellular company wants him to stay and has offered to help him with costs involved in opening his store. Against my own judgement I agree to let him continue on the condition that he signs a revised lease and immediately makes a payment of $1250 that will go towards the settled $3000 back rent owned, and then he can continue to pay $1250 on the 1st of every month. Of course he takes 2 weeks to get me the signed revised lease and gives me a check POST DATED for the 22nd (tomorrow). To be clear he never signed the revised lease, or the promissory note, or this new lease. In essence, the original 5 year lease is still in effect.My question is do I have the right to deposit the $1250? Again I have not signed the revised lease at all, and I would consider this payment towards back owed rent. By depositing this check do I risk implying that I agree to the revised lease? My instinct and experience tells me that I am perfectly within my rights to deposit the check, but I figured it wouldn’t hurt to ask this community since this is kind of an unorthodox situation.

Read more at https://www.reddit.com/r/RealEstate/comments/6cjyuf/commercial_tenant_advice_needed/?utm_source=ifttt

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s