Can I evict a tenant I inherited in a commercial real estate purchase?
Hello, I recently bought a commercial real estate strip center. One of the tenants is a laundromat. He has an ongoing lease from the previous owner that carries over to me. It states there's a renewal option every five years. The next renewal is coming up in three years. There’s no wording on rent increases. He’s been paying $800 for the past five years and will continue at that rate—nothing more. Is there a way to evict this tenant?
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Based on what you've described, here are a few important legal considerations:
- Lease agreements are binding contracts. If it includes a renewal option with no mention of rent increases, the tenant may continue paying the same rent during the renewal.
- Since the tenant is in compliance, eviction is not straightforward and typically requires a lease violation.
- The absence of a rent escalation clause severely limits your ability to raise rent during the current term.
Here are some potential next steps:
- Review the Lease Thoroughly – Look for clauses allowing renegotiation or termination.
- Consult a Real Estate Attorney – They can advise you on negotiation or legal options.
- Negotiate with the Tenant – Explain your financial constraints; the tenant might be open to renegotiation.
- Plan for Future Leases – Make sure future leases include rent increase terms and clearer renewal clauses.
I wish I had better news, but I must be honest in my legal assessment. Has this response been helpful, even if not what you hoped to hear?
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Hello, I recently bought a commercial real estate strip center. One of the tenants is a laundromat. He has an ongoing lease from the previous owner that carries over to me. It states there's a renewal option every five years. The next renewal is coming up in three years. There’s no wording on rent increases. He’s been paying $800 for the past five years and will continue at that rate—nothing more. Is there a way to evict this tenant?
Lexi, Chatbot
Congratulations on your new purchase! Can you tell me what specific issue or question you have regarding the commercial real estate strip center? Are you looking for legal advice on property management, leasing agreements, zoning regulations, or any other aspect related to owning a commercial property?
Yes, legal advice on property management.
Lexi, Chatbot
Is there anything else the lawyer should know before I connect you?
That’s all. The lease states rent is $800, with an option for renewal every five years. One renewal is completed, he’s in the second term with three years left, and has another five-year renewal option after that. I want to increase the rent. I can’t afford such low rent for this commercial space due to my loan. Would I be able to evict him?
Benjamin
Hello and welcome to AskaLawyer. My name is Ben, and I'm a licensed attorney. I'm sorry to hear about your situation. I’ll try to help. First, I need some additional information:
- Does the tenant always pay rent on time?
- Is the tenant violating any of the tenant's obligations under the lease agreement?
Yes, he pays rent on time. There are no other violations.
Benjamin
Thanks for confirming. If the tenant is current on rent and complying with the lease, on what basis would you evict him?
He’s on his second term with no changes. The lease is biased towards the tenant. Do I have the right to make any adjustments now?
Benjamin
Does the lease say you have the right to adjust rent when the tenant exercises the renewal option? A well-written lease typically includes a clause allowing the landlord to increase rent.
No, it doesn’t say that. It was written by the tenant and is very biased.
Benjamin
Based on what you've described, here are a few important legal considerations:
- Lease agreements are binding contracts. If it includes a renewal option with no mention of rent increases, the tenant may continue paying the same rent during the renewal.
- Since the tenant is in compliance, eviction is not straightforward and typically requires a lease violation.
- The absence of a rent escalation clause severely limits your ability to raise rent during the current term.
Here are some potential next steps:
- Review the Lease Thoroughly – Look for clauses allowing renegotiation or termination.
- Consult a Real Estate Attorney – They can advise you on negotiation or legal options.
- Negotiate with the Tenant – Explain your financial constraints; the tenant might be open to renegotiation.
- Plan for Future Leases – Make sure future leases include rent increase terms and clearer renewal clauses.
I wish I had better news, but I must be honest in my legal assessment. Has this response been helpful, even if not what you hoped to hear?
Yes, I appreciate your advice. That helps clarify the situation.
Benjamin
I'm glad I could help.
Benjamin
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