What can I legally do to fight back a commercial landlord who discriminately declines us an option to renew?
My family purchased a Chinese restaurant business in a commercial shopping center about five years ago in California and our five year lease is up in August. The owner of the commercial property has not offered our restaurant business an option to renew our lease. We had already invested a couple of hundred thousand dollars in this business (including expensive computer and kitchen equipment), but as the end of the lease approaches, we’re scared that we can’t even sell the restaurant off even if we wanted to. I have spoken with the Asset Manager of the company that owns the property and he said that he cannot give us a long-term lease but we can pay rent on a month-to-month basis.
When I asked why couldn’t we get a long-term lease renewal, he originally said that they were going to do some remodeling on the entire front building complex (the building’s arcade) after our lease ends sometime while we’re paying rent on a month-to-month basis and then he said that we will need to vacate the premises once construction actually starts (he also said that he was going to give us a 30-day notice to vacate as well). But then I asked if we could get our original business location back after construction has completed… A moment later he said that there’s going to be a "70% chance that there’s going to be investment in the property" so that they can "change up the assortment of tenants on the property" towards a specific marketing concept where there will be select requirements for the new tenants: business income level, type of business, ability to pay higher rent, etc. I don’t exactly know what kind of "marketing concept" he was going for or even if restaurants were a part of that marketing concept equation’s composition.
It’s interesting to note that some of our family business’ neighboring tenants are also of Asian-descent, but they have about two years of their lease left. I just found it odd that they were targeting our mom and pop businesses and slowly try to get us out of the shopping center.
Can this company just kick us out like that? Isn’t there some sort of California Commercial Code that says this illegal? But more specifically (and what my family’s more concerned about), is there any way to make the company help us recoup our losses from having to find another location for our restaurant business?
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4 Responses to “What can I legally do to fight back a commercial landlord who discriminately declines us an option to renew?”
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They are not kicking you out, they are simply electing to not renew your lease. The only way to guarantee that you will always have a permanent location is to own the building. Keep up as long as you can with the month-to-month situation, but be looking for a new location. Month-to-month also means that you can leave when you want to with 30 days notice. There are no laws that will force them to help you move - you only signed a 5 year lease and that time frame is now over.
The aren’t obligated to offer you a renewal. No, there is no way to get them to "recoup your losses". This is the risk you run when you lease space.
You are business persons, and you knew when the lease would end. No, there is no commercial code that requires a landlord to extend the lease beyond the lease’s agreed-upon expiration. You should have asked for an extension when you purchased the restaurant.
I’m sorry if I sound so insensitive, but that’s how the law works. The law really does not give much flexibility to commercial tenants, because it is presumed commercial tenants are smart, prudent business people who can look out for their own financial and business interests without having to have their hand held by the government.
On the plus side, you might be able to remove and sell some of the equipment you installed, or move it to another business site. Talk to an attorney — your right to remove the equipment depends on the terms of the lease, as well as the nature of the particular equipment and its installation. In other words, an attorney will need to look at your lease, and also look at your equipment.
nothing illegal about not renewing
you see stores all the time with signs - "We lost our lease - going out of business"
BEFORE you invested all that money, you should have negotiated a longer lease way back then