You Ask- We Answer- "It Depends"

LEGAL MATTERS COLUMN FOR NOVEMBER 9, 2007


YOU ASK – WE ANSWER – “IT DEPENDS”

For this week’s column, we answer some questions that were recently submitted by readers (questions have been edited for space):

Dear Steve and Scott:

I have a small business that I’ve put my heart, soul and last dime into. Unfortunately, I have a lot of retail competition and it seems the only way I’ll survive is to close my storefront and keep only the Internet business portion, which I can run out of my house. The problem is that I still have 22 months left on my three year lease. There is no way I can afford to keep the retail location. Can I legally get out of my lease so that my business can have a chance to survive?

Hanging On (Barely)

Dear Hanging On: Time for the standard lawyer answer…it depends.

Not that we think this will make you feel much better to hear, but know that yours is a tale of woe we’ve heard many times before.

First point, when you use the word “legally,” it’s important to remember that there is nothing “criminal” involved in not complying with all of the terms of your commercial lease. It is strictly a civil matter – you’re not going to jail for bailing on your lease early.

You should first try to find someone to sublease your retail space and assume your lease obligations. Check your lease for any restrictions on the sublease or assignment of your space. Though you’ll still be on the hook if the sublessee defaults, it may provide some relief for the time being and could work out in the long run.

If you can’t find someone to take over the space, discuss the matter with your landlord to see if you can negotiate an early lease termination. Though the landlord technically can hold you to the value of the unpaid rent for 22 months, every landlord, when faced with an early lease termination, has a duty to mitigate damages. This means that the landlord must be diligent in trying to re-lease the space and not just leave it empty under the assumption that, since you’ll be paying the rent anyway, there’s no hurry to find a replacement tenant. In fact, if you left the premises before the end of your lease and the landlord later were to sue you to recover for lost rent, she would have to prove to the court’s satisfaction that reasonable, good faith efforts were made to re-lease the space. This would include evidence of reasonable marketing efforts, timely preparation and availability for showing, fair market lease rate, etc., before being awarded any damages. Good luck.

Dear Scott and Steve:

My aging mother lives with my brother and up until several months ago was doing fine. However, after a series of small strokes, she is now unable to take care of her daily activities and she requires live-in help. She has plenty of money to pay for this but neither of us is on any of her financial accounts and she is beyond the point where she can sign checks or do any banking. Though she previously spoke of doing so, she never got around to appointing either of us to handle her affairs. Is there anything we can do now to get access to her money to pay for the help she needs? We both work and neither can afford the time or money that her care now requires.

Help

Dear Help: We’re sorry to hear of your dilemma and, again, it’s not an uncommon occurrence. The good news is the problem can be resolved by getting the court to appoint you or your brother as a conservator for your mother. Initially, the court may grant you or your brother a temporary conservatorship, pending a hearing for more permanent status. Unfortunately, the entire process is rather cumbersome and lengthy and involves several court hearings, extensive documentation, ongoing court monitoring and $4000 or more.

By comparison, if your mother planned ahead and executed a power of attorney (which would have cost less than $500), the transition would have been instantaneous and could have been accomplished without court supervision. It really does pay to plan ahead because one never knows when these types of documents may be needed. Good luck.

Dear Scott and Steve:

When I started my new job, my boss said I would be an “at-will” employee. Now that my probation period has ended, can they still fire me anytime they want?

Wondering

Dear Wondering: It depends – though probably yes. California is an “at-will” employment state which means that, in the absence of an employment contract providing for a specific employment term, the employer or the employee may end the employment “at-will” meaning - at any time and for any reason - without notice. Naturally, the “reason” must be a legal one and must not be based on discrimination, harassment or a retaliatory or wrongful purpose.


The information herein is intended to be general in nature and does not constitute legal or tax advice. Send column suggestions or questions to info@SolanoLawGroup.com, fax to Gizzi & Reep, LLP at
707-748-0921 or mail to 940 Adams Street, Ste. A, Benicia.