Case Study
Adam Leitman Bailey, P.C. Evicts and Secures Full Recovery for a Landlord Against A Scheming Commercial Tenant and No Personal Guaranty of the Lease
A personal guaranty of a commercial lease is the only means of requiring an someone to pay the rent when a corporate commercial tenant defaults. Too often, a new property owner assumes a commercial lease that its predecessor failed to secure with a personal guaranty. Where there is no guarantor for the rent, a corporate commercial tenant nearing the end of its lease term, can manipulate the judicial process and landlord-tenant procedural laws to slow down collection proceedings. This enables it to profit off the leased premises and without paying a dollar of rent for the last months of the lease. That commercial tenant will even try to leverage the fact that it can get away without paying rent for those last months of the lease in an effort to negotiate better terms for a new lease.
Adam Leitman Bailey, P.C. represented a property owner who unfortunately acquired an unguaranteed corporate lease, for a bustling pizzeria business. Approximately, five months before the end of the lease term, the commercial tenant stopped paying base rent and additional rent due for real estate taxes and water charges. In month one of its default, a principal of the corporate tenant attempted to leverage its own default to negotiate a discount on the balance of the lease and a lower rent for a new term.
Adam Leitman Bailey, P.C. immediately commenced a nonpayment proceeding and fast tracked it through the statutorily prescribed lengthy procedure by staying one step ahead in the process, preparing and serving notices the instant the law allowed and vigorously advocating and convincing judges that the tenant was using the judicial process to keep the business open while not paying a single dollar in rent. Ultimately, the landlord secured a money judgment for the arrears and guided the client on commencing enforcement proceeding which resulted in the client’s recovery of arrears at 100% with reimbursement of legal fees.
On the first day following the expiration of the lease, we commenced a holdover proceeding. After oral argument, the Court ordered judgment in favor of our client and issuance of a warrant of eviction. In the end, the new owner without a personal guaranty of its commercial lease collected the rent owed and evicted the tenant.
The landlord was represented by Carolyn Z. Rualo, Esq. and Christopher E. Halligan, Esq.