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Ratings. Guidance. The Right Lawyer.
real estate
Bloomingdale, IL
Viewed 39 times.
Posted 11 months ago in Real Estate
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I have a building that I am leasing for 5 years at $6500.00/mth.
At the ned of 5 years, 06/15/2011, I can buy for 1.2 million or walk away with nothing. It has 5 tenants. Me being two of them. I wrote my own leases and signed them. I am getting a divorce also so a "lawyer friend" suggested to write a large monthly rent within reason to show my expenses. Now the true owner of the building is using it as collateral with his bank and wants copies of all the leases. Should I give him copies of my current leases and can I be held to them in court even though I signed as lessor and lessee? Should I make another lease with lower rents, within reason, that are more in line with my tenants? Should I add addendums to protect myself? - Is this your question? Add additional information Answers (1)
Colin Francis Carr
This attorney is licensed in Illinois.
Posted 10 months ago.
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Your leases to yourself -actually sub-leases- may be invalid. Moreover, they may get you into tax and other trouble. If not you, but a corporate entity has the master lease with the building owner, you may be safer. A lease is a contract, and to be valid, contract must has bargained for consideration. It is likely that most courts, whether divorce or otherwise, will not view the leases as being valid, as you can not bargain with yourself, and paying yourself rent is not a real transaction. It seems you are creating a dangerous sham.
As to whether you need to give the building owner copies of you sub-leases, that likely is determined by what is in your lease with him. He only has rights to the income received from your lease with him, unless there are lease provisions to the contrary. His bank may want to see the subleases so they can get an idea of possible income from the building. An examination of your lease with the building owner is needed to fully answer these questions. |
