Q: I'm in 10 year personal guarantee lease in a development that failed to be developed. Can I get out of it?
Since they all pulled out so did most of the tenants. Center filed BK and went into foreclosure. A few attempts to take on buyers of the center of come and gone. NO ATTEMPT to lease the center has taken place. Can I leave, ramifications? Counter sue?
A: Possibly. However, many commercial leases include a subordination, non-disturbance, and attornment agreement (SNDA), in which the tenant agrees to continue its obligations under the lease if the property is transferred in a sale or foreclosure. Other leases provide that the tenant may terminate its lease without penalty if a certain portion of the development is not leased, or if certain "anchor tenants," e.g. Bass Pro Shop or Wal-Mart, discontinue leasing. Additionally, if the landlord materially breached the lease first, the tenant is not required to stay. Depending on the remaining term of the lease, the financial status of the tenant, and the potential for litigation, a landlord may be willing to renogotiate the lease to more favorable terms.
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