my wife resturant in the middle of the threat of eminant domain
My wife recently signed a 20 year lease and just spent 180K on a patio/outdoor venue for her restaurant to increase buisness,  Last week the landlord mentioned that the property could be considered eminent domain and is considering selling the property to a land developer  who just bought the vaccant lot next door, his ideal to convert the property to  multifamily appartments. She pays about 3k a month, and the buisness is struggling. What  The landlord does not want to sell the property to her.  what should she do?
[{"id": "i0etj5x", "text": "Well, that's not really how eminent domain works. A governing body has the right of ED, not a private party.\n\nA private party may be INTERESTED in the property. Your landlord owns it (I assume) but if you have a 20 year lease, your wife has the right of occupancy to that venue for 20 years. Period.\n\nSo at some point, if the land developer/landlord come to your wife and say \"hey we want to buy out your lease\" you  have the right to negotiate for at least recovery costs + some reasonable sum to get you to walk away. Or you can continue to occupy the space.\n\nJust be careful if that negotiation happens; the developer is not 100% obligated to buy that piece of land, so you can't ask for a billion dollars. There is a price that makes sense for the developer, there is a price that it does NOT pencil out at all, and the developer would walk.", "replies": [{"id": "i0ettg4", "text": "he did mention that , the land developer is confident it could be done. He is in the sector", "replies": [{"id": "i0eutkg", "text": "Um\n\n\nI think what would be reasonable is for your fixturing costs to be reimbursed + the difference in market rents vs contract rents for the duration of the term. + Something for your trouble. How long is the term off the lease (when will rents be renegotiated?)\n\nEdit. Contract rent", "replies": [{"id": "i0f5d1j", "text": "the rent was renegotiated last year, and I dont know what context rent  ,  I really appreciate your message", "replies": [{"id": "i0fjhce", "text": "Sorry, contract rent.", "replies": [{"id": "i0fjq4s", "text": "Is that lease a fixed term of 20 years, does the rent escalate over the 20 years? In my market it's typical to negotiate rents for 5-10 years at a time (5 year terms with options to renew at market rents)", "replies": [], "depth": 6}], "depth": 5}, {"id": "i0o6xnd", "text": "How Indian are you?", "replies": [{"id": "i0q5xyw", "text": "? None", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "i0fwhpa", "text": "You should engage an attorney to represent you if the Landlord sells the property to a developer.", "replies": [], "depth": 3}], "depth": 2}, {"id": "i0fcq4p", "text": "Sorry but \u201cperiod\u201d is not the end of story. Landlord may have a termination right or a relocation right.", "replies": [{"id": "i0fedqx", "text": "You\u2019re 100% right. There are specific provisions of course, in every contract.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i0eu670", "text": "Take a look at your lease and see if it prohibits you from recording it at the clerks office. If not, that's probably the first thing I'd do. Probably should talk about that with a real estate attorney as details may be specific to your state. But if people are circling the property, this would create a public record of your wife's lease.\n\nEdit- if the business is struggling, this could be an opportunity to get bought out of the lease and the improvements, recoup some money and exit the business. Just a thought.", "replies": [{"id": "i0euqth", "text": "the property is in an urban area in San Diego , with two high rise complexes 75% completed  less than a miles away", "replies": [{"id": "i0eyndk", "text": "I'm gonna be honest, it kinda sounds like you may be looking at this potential windfall as winning the lottery. It's most likely not that case.\n\nYou need to consult with a CRE broker to know what price to buy-out your lease would pencil out as.\n\nYou also need to decide on the two outcomes;\n\n1. You agree to a price, it's not what you want, but enough to make you walk away.\n2. You do not agree on a price, you CONTINUE TO OPERATE your underperforming business.\n\nOn the developer side, I've tried negotiating with leaseholders who think they come across a millionaire-making opportunity. News flash, I can just do the deal without you, or I can walk away from the deal and do dozens of others. \n\nSo negotiating from your side, you need to be very knowledgable about what pencils out.", "replies": [{"id": "i0hw52d", "text": "There is a third option nobody is talking about. If the business is in a desirable area and if it would make a good home for another restaurant, perhaps a better run restaurant would outperform. With a 20 year lease, the business itself, which is the renter, could be sold with the lease (not a sublease which would require permission from the landlord typically). As I said before, to a landlord that wants to sell to redevelop, the scariest prospect is a happy, healthy business that intends to stay for 20 years. That's your leverage.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "i0f04wv", "text": "Don\u2019t need to record a MOL if the business is operating. Recording puts a buyer on notice - not necessary when there is notice through an operating business.  The only leases I\u2019ve ever seen a need for recording are long lead times to occupancy, where the tenant needs to record an exclusivity clause, or ROFRs/options to purchase.", "replies": [{"id": "i0f26y0", "text": "Okay that's fair I suppose I've only seen them recorded when there were exclusivity clauses.", "replies": [], "depth": 3}], "depth": 2}, {"id": "i0f77f3", "text": "I think thats what my wife is hinting", "replies": [], "depth": 2}, {"id": "i0fhqvj", "text": "This is Best advice here!", "replies": [], "depth": 2}], "depth": 1}, {"id": "i0exth9", "text": "I assume it's not a 20 year lease. What is the initial term?  Likely 5 or 10 years.  You do not include options into the \"lease years\" as those are executable only.\n\nIn regards to eminent domain, that has nothing to do with the Landlord.  If the Landlord sells the property the new owner must adhere to any existing lease.  They cannot terminate the lease for redevelopment unless stipulated in the lease.\n\nThat said, if your wife's business is not performing well it may be an opportunity to get out of the lease.  It is normal for a developer to pay X times the EBIDA to buy out the lease.", "replies": [{"id": "i0ez0l9", "text": "This is also a key point. A 20-year lease would be extremely unusual esp. in San Diego. You do NOT count the options to extend. \n\nOnly the initial term matters in the negotiation.", "replies": [], "depth": 2}], "depth": 1}, {"id": "i0ezyx9", "text": "* A lot of the advice below is spot on, especially HomoChef. Eminent Domain can only be done by a government.\n* A written, signed and countersigned lease, provided it was competently written is all you need to stay in the building for 20 years, as long as you keep paying rent.\n* If the business is struggling and your wife wants out, and if she spent $180K for build out, you need to find the best commercial real estate agent you can. Explain the situation, and have the agent negotiate the best deal for you.   \n\n* I want to be clear here. DO NOT call your crazy brother-in-law who sells houses occasionally. Commercial real estate is very different and the people who do it well are sharks. Sharks you want working for you. If you do it right, if your land lord is serious about selling, you could walk away with a substantial sum of money. More than your wife spent on the business.   \n\n* In fact, the best leverage you have going for you is NOT leaving the rented space for 20 years. The right developer will pay handsomely to have you leave if they are sure they can build whatever they want to build in the future.", "replies": [{"id": "i0fjqy8", "text": "Homo Chef always gives good advice", "replies": [], "depth": 2}, {"id": "i0gt9ic", "text": "Kilo v city of london said the govt can ED for private use if it's in the public interest. https://en.wikipedia.org/wiki/Kelo_v._City_of_New_London", "replies": [{"id": "i0hxy0r", "text": "Bill O'Rights 5: No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, **or property, without due process of law; nor shall private property be taken for public use, without just compensation.**\n\nThe government *can* take property but they have to pay for it, and even though Kelo was decided wrongly (in my opinion) the government seldom does. It's always very bad Public Relations (i.e. elections) . In addition almost all states wrote laws making what happened in Kelo much harder after the backlash of this supreme court case. Finally, \"Just Compensation\" for property is an open question that needs to be decided by a judge which will take years and years and years. \n\nA properly executed lease is a property right.", "replies": [{"id": "i0jfosa", "text": "He was saying the buyer was going to do ED, but private party can't. I was pointing out that it could be done, but via govt.  Oh fore sure, a good friend of mine only represents ED 'sellers' and gets them just compensation.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i0f3skk", "text": "It's already been said but eminent domain is solely the purview of the government and there really is a high level of scrutiny to make that happen. No matter what the landlord or the developer claims, they don't have a magic wand they can wave and displace your wife's business. It will take months if not years for that process to run its course. In any event, the developer will have to buy out your wife's lease.\n\nIf the business is struggling anyway, then it's time to figure out the price for her exit, negotiate with the landlord/developer and recover the money spent on the build out, walk away with your reasonable sum of money, and do something else with your lives in place of stressing over a business that may not even make it through the term of the lease.", "replies": [], "depth": 1}, {"id": "i0fx71n", "text": "Seek legal advice, she has 20 year leases signed, does it have a number of days notice to move if sold?", "replies": [{"id": "i0ilura", "text": "A lease is an encumbrance on property rights for a term that follow the deed. New owner has to honor the lease. Otherwise selling to your relative would be an easy out for any landlord to get rid of a tenant if market rates shot up.", "replies": [], "depth": 2}], "depth": 1}, {"id": "i0gexsi", "text": "I would:\n(1) follow HomoChef\u2019s advice, and\n(2) consult an attorney with CRE experience. Ask said attorney to review your lease contract for specific terms that might apply to your particular situation.", "replies": [], "depth": 1}, {"id": "i0hmy7m", "text": "She should tell the landlord to make her an offer, negotiate a large amount for compensation and move her business to a new location\n\nOr \n\nSimply just tell him the number it would be for a buy out / you leaving , everything\u2019s for sale seats the question is how much for you to leave", "replies": [], "depth": 1}, {"id": "i0k3r3b", "text": "I work in Eminent Domain as a commercial real estate appraiser for the state of Florida. It sounds like the landlord is confused by what Eminent Domain is, and is trying to renegotiate the lease, or is trying to pressure her into a sweetheart deal for him. \n\nAnother possibility is that there is a proposed project coming and landlord is trying to cut you out of the proceeds. Check local and state sites for upcoming or proposed projects. Make a call to the public information offices of the city, county public works or transportation departments. And any other agencies that might be needing your site. You are requesting info on any projects in your area. Might be obscure. \n\nDon\u2019t discount anything else in this thread. \n\nThere are thousands of attorneys that advertise help in Eminent Domain or \u201cCondemnation\u201d. I\u2019d recommend educating yourself first. It can be confusing, overwhelming and emotional especially with the $180k out of pocket and low sales lately. Take time to read the lease.", "replies": [], "depth": 1}]