Commercial leases can involve terms longer than personal ones. Companies, especially large entities, may want to maintain offices or facilities in a specific location long-term. If your business defaults on a lease, it means that you fail to comply with one or more provisions in the leasing agreement. When this happens, your landlord sends your company an official letter. They have the right to hold you accountable for any missing payment and damages associated with your default. If you cannot come to an agreement with your landlord, they may sue your company. They may also sue you, if you have personally guaranteed your company’s lease agreement. If that happens, then your are personally liable under the lease and your personal bank account, home and assets in your name are vulnerable to collections.
The penalties for defaulting on your corporate lease include the following:
Regardless of how familiar you may be with your company’s finances and the terms of the lease, you should talk with a lawyer to review your lease agreement before you default or if you have already defaulted, so that you can understand your risks.
Hire a Reputable Attorney to Negotiate Your Corporate Lease Default
If your company is likely or already has defaulted on a corporate lease, you should contact a specialized attorney who is familiar with the area and the legal requirements as soon as possible. While an experienced lawyer can mitigate consequences in various situations, the more time they have to help you remedy the default, the more likely a positive outcome is.
After a careful review of your company’s finances and obligations, your attorney can recommend one or more legal solutions, including bankruptcy chapter 11, which focuses on repaying your debts so that your business can get back on track. Working with an attorney familiar with bankruptcy and corporate specificities can help your company create an action plan to avoid similar issues in the future.
Even if you believe your company can handle the default on its own and directly find an agreement with your landlord, hiring an attorney can make a difference. Expertise and knowledge including changing policies and regulations, can minimize legal and financial trouble for your business and better position your company for success.
Contact The Financial Relief Law Center today at (949) 570-5466 to schedule an appointment to discuss your options to remedy a default on a corporate lease in Irvine!