I am often asked by worried property owners involved in a legal case whether they can simply sell their properties and ignore the case. After all, if the property owner liquidates everything, how can the opposing party collect a judgment? Is it not cheaper to liquidate rather than defend a case and pay a judgment?
The quick answer is that there is no law that prohibits a sale, but the seller probably will not like the consequences. If the opposing party discovers the property has been listed for sale, an emergency petition can be filed to stop the sale. But even if the seller can make a transfer without the opposing party’s knowledge, the sale can still be reversed.
Real estate is one of the world’s oldest forms of investment. What happens when you pair land and buildings with cutting edge technology like “blockchain”? Some of the most innovative real estate investors are experimenting with this technology. Many investment opportunities will be created in the coming years with this technology.
Blockchain is like a database except that it is publicly controlled.
Courts interpret commercial leases very differently than residential leases. Tenants in residential leases receive protections of local ordinances and consumer protection laws. There is often an assumption in commercial leases that both parties are on equal footing or have a certain level of sophistication in negotiating lease terms. Commercial leases are therefore interpreted more strictly.
Small businesses seeking leasing space should be aware of potential pitfalls in commercial lease agreements. Unlike residential leases where the law provides many consumer protections, tenants in commercial leases are free to negotiate nearly any terms – even if terrible consequences may result.
Below are five common lease terms that small business tenants should avoid:
1. Confession of Judgment
Pennsylvania is one of only a handful of states that still permit a Confession of Judgment. A confession of judgment clause is a lease term that permits the landlord to file a judgment with the court against the tenant if the tenant breaches the lease. A confession can be thought of as an automatic judgment that may include possession of the property, back-owed rent or liquidated damages. The tenant does not receive a hearing or opportunity to present a defense except under limited circumstances.
2. Personal Liability
A small business owner should limit liability in the lease to the business entity only, not in the personal name of the owner. Landlords often demand personal liability as disincentive for a tenant’s decision to default and walk away from the business. But a confession of judgment paired with personal liability is a terrible combination for a small business owner.
3. Responsibility for Repairs for Damages Caused by Another