Question about leases

[sao]

Has anyone ever had a landlord increase their rent with the intention of forcing you out of business? Can a landlord do this and then conveniently start their own mat? Is this legal?

Sao

[Kitty]

Yes, if a lease has expired or enabled the landlord to excersise his legal rights to the property. Legal and fair depends on who you ask; the lessor or the leassee.

[sao]

Ouch!
The continuity of the lease seems so important. With no lease, the equipment might as well be scrap metal. In Southern California, it is difficult to lock into long term leases. Do you have any advice on how to protect yourself when commercial space is in high demand?

Sao

[Jim]

There really is no way to protect yourself if your lease is up and the landlord dosn't want to renew...or if he raises the rent to the point it dosn't make good business sense to renew on your part.

Those are the chances we take for being in business..

[Anonymous]

You can still sell your business to the landlord. But I don't thik he will pay much for it.

[Jim]

Originally posted by actionmedia
You can still sell your business to the landlord. But I don't thik he will pay much for it.

Why would he pay a penny for it....If he dosn't renew your lease he owns it free...Yes he would have to go out and get equipment but the build out is there.... or he can offer to buy your equipment at a low low price....most likely your going to sell otherwise you need to move and store it somewhere, which is going to cost you.

Then you have to try to sell it....if you have seen the journal recently...how many pages of used and repo'd equipment are in the back....

[Anonymous]

Originally posted by Jim
Why would he pay a penny for it....If he dosn't renew your lease he owns it free...Yes he would have to go out and get equipment but the build out is there.... or he can offer to buy your equipment at a low low price....most likely your going to sell otherwise you need to move and store it somewhere, which is going to cost you.

Then you have to try to sell it....if you have seen the journal recently...how many pages of used and repo'd equipment are in the back....

That happens only if you never consider it before and dont't have a back-up plan. I don't think someone would buy or build a business without tryng to preview potential problems.
I know location is the most important aspect in laundromat business, but there are other things to take in consideration like:
1. Building good relationship with your clients.
2. Building a good image of your business.
3. A brand name, an identity. Small usual things that peoples get used to it and get to love it, like position of the equipment, snack, soda machines, entertainement, light and so on.
4. Data base with your clients
5. WDF and drop off.
6. Attended or unattended.
All that and more could help finding an escaping route. All you need is time.
Even if the landlord will rise the rent to a prohibitive value to kick you out of there may be you could pay him few month that rent to buy more time.
Find another suitable location in the naigbourhood.
Register all your trade mark and inovations as no one else could use it without your aproval.
When you are ready make the gamble. Tell the owner that if he keep rise the rent he have 2 oprions:
- Buy the business.
- Face the competition.
Make sure he understand that your next laundromat will be few buildings away. That you will take all the equipment. That you will take most of the clients with you, that he will have to start from scrach, that he will not be able to use your trade mark unless he buy it and so on.
I asume the landlord know too litle about laundromat business to dare challenge you in direct competition only because he have the location.
It is some sort of bluffing but if you know how to do it I tink there are real chances of scucces.

[Jim]

I like the Bluff part....and I agree with what you are saying but hopefully their is a close location otherwise you will lose customers that are used to going to the current location.

Action, are you sure you in Romania ? cause you sure sound like your over on this side of the planet...

[Anonymous]

Originally posted by Jim

Action, are you sure you in Romania ? cause you sure sound like your over on this side of the planet...

Yeah! I live in that small country called Romania.
I used to read a lot of american business books.
I browse for some time coin laundry related forums
I am a salesman (I sell advertising)
Poker is universal game.
And we Romanians have latin blood, we are soccesors of ancient Rome. After the Jews, the Italians are the second best business-peoples and we are their cosins. :-))

All that should explain your impresion

[Anonymous]

Originally posted by Jim
I like the Bluff part....and I agree with what you are saying but hopefully their is a close location otherwise you will lose customers that are used to going to the current location.



Hopfully the landlord will buy the business or lower the rent otherwise the chances to loose the game are extremely high

[pete f]

read the lease. I have (own proprty and rent to) a lease with someone now, it expires in Sept, and they have first right of refusal, "at that time a new rate and time will be established"

I am raising the rent about 25%. I don't care if they stay or not. I have a use for that property if the tenants don't want to stay.
So yes, you can be forced out by higher rent. In my case they are wiling to pay the new rent, and really, it is not even market rent, gave them a deal years ago, and they knew that.

I know a mat that closed recently, and I am sure it was becuase of higher rent. I know of another that will close as soon as the building is sold, again, to high rent for a mat in that loaction. And I know of another that the landlord went year to year when the lease expired, though I do not think the rent went up to much. that property, after being a strip center ( the mat for 26 years) will be a condo project within 5 years, I bet.

I know another mat that was in a big center, his lease has options, but when he was assigned the lease when he bought the business, there was some sort of clause that let the landlord not have to renew the lease. He got screwed, lost the mat, the place is now big name retail, ie, circiut city, bed bath beyond, toys r us, etc. The landlord wanted to upgrade the property to bring in better tenants. Look close at what could happen in 5, 10 years.
The real estate market around the location will determine your lease in the future.