How can a business partner get out of a commercial lease when leaving a company?

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq.

An award-winning small business attorney in New York City, Nina is a sought-after professional speaker and Entrepreneur Magazine online contributor. She is the go-to counsel for knowledge economy and creative companies, delivering legal services and educational resources that save them time, money, and aggravation.

Posted on April 20, 2015 in Business Transactions

Q.:  I started an LLC with two partners. After a year in business, I am choosing to take another path. I want to resign from the LLC and am attempting to separate my legal liabilities. We initially signed a three-year commercial lease with personal guaranties and currently have 23 months remaining. Is there a convincing argument I can bring to the property manager/owner to be removed from liability on this commercial lease?

 

A.:  Good luck. In this real estate market, landlords will want to keep as many deep pockets as they can find on a commercial lease.  The landlord is not obligated to release you from the commercial lease, because your agreement to be responsible for the LLC’s commercial lease debt was not contingent on whether you remained with the company or not.

 

Your first step is to find an attorney in your area to advise you.  Next, inform the landlord that you will be leaving the business and request to be removed from the personal guaranty.  If the landlord says yes, you’ll want the attorney to help draft the necessary amendments to the commercial lease and personal guaranty.  If the landlord says no, you’ll want the attorney to draft a document whereby the remaining partners agree to indemnify you if the business defaults on the commercial lease and the landlord comes after you.  Make sure you do this as part of a coordinated exit plan with your partners.

 

What other law questions do you have about commercial leases and office space?

 

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