Buying an existing store, landlord making unreasonable demands.
Hi everyone!  My husband and I are in the process of buying an existing successful retail store. This store has been in business for over a decade and has always been operating firmly in the black and very profitable.  It's still in its original location, the corner of a strip mall in a busy area in the metro area.  

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The current owners and my husband reached out to the leasing company that owns the strip mall to let them know of our plans to take it over, and they sent over an application with some confusing and frankly scary stipulations - and I could really use some advice.

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First, they want the existing owners to stay on as lease guarantors.  That sucks, but it's at least workable.  But the most ridiculous thing they want is proof that we have three YEARS of rent money in liquidity sitting in the bank.  As you can imagine, that's way more than even our house is worth.  

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How could they possibly expect anyone, short of a large corporation, to have this?  It seems like a tactic to abuse us, and I'm not sure what to do.  I don't know if we need to hire representation or what - which in and of itself is scary because come January we need to pay tens of thousands of dollars to the bank for the downpayment for the store in order to sign the papers to transfer ownership.

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Any advice anyone could give us would be \*very\* much appreciated!  

Thanks so much! 

\-P
[{"id": "e7emqz2", "text": "Do the previous owners have the lease that they signed with the LL? ", "replies": [{"id": "e7emzvm", "text": "They do, yes. There's a provision in there saying they're allowed to sell it to someone who's worked at the store for at least 3 years (husband's worked there for 6).", "replies": [{"id": "e7enpnc", "text": "Does it state what happens to the lease of ownership changes hands?", "replies": [{"id": "e7eop5t", "text": "I'm not really sure, actually :(\n\n&amp;#x200B;", "replies": [{"id": "e7f83gz", "text": "Find out.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "e7en1pv", "text": "Hopefully 1) your deal on the store is conditional upon receiving approval of lease transfer from landlord, 2) asking for previous seller to stay on to guarantee sometimes happens, 3) the 3 years of rent in bank is more than likely a negotiating point that may be common or not depending on where you are. What Landlords are looking for is security whether it be a large deposit, prepaid rent, strong corp. covenant, personal guarantee, letter of credit, proven operational capability etc. Just talk with them to find out why they're asking for that and negotiate for something reasonable. Enlist the seller of the property to help of course.\n\n&amp;#x200B;\n\nAs for whether you should get 'representation', you could reach out to a CRE leasing guy or a lawyer familiar with leasing docs - you'll need one anyways to review the final lease docs. ", "replies": [{"id": "e7enfe3", "text": "Understood - thanks so much!", "replies": [], "depth": 2}, {"id": "e7eskhi", "text": "&gt; As for whether you should get 'representation', you could reach out to a CRE leasing guy or a lawyer familiar with leasing docs - you'll need one anyways to review the final lease docs.\n\nOP should have independent counsel for more than this above. \n", "replies": [], "depth": 2}], "depth": 1}, {"id": "e7eqnjv", "text": "Please tell me you\u2019re being advised by counsel. Not just for the assignment but the purchase of the business.", "replies": [{"id": "e7erqdq", "text": "No, not really - other than getting some advice from the current owners, and the CEO of the company I work, no.  Aside from an attorney, I wouldn't know who to look for.  I'm also very worried about using our limited funds.", "replies": [{"id": "e7es3is", "text": "You need a lawyer. Depending on how they structured it you may just be able to buy the LLC's assets. In this way the landlord doesn't have to approve anything, you're stepping into the shoes of the current store owners. ", "replies": [{"id": "e7eskhc", "text": "The current lease is with the corporation that owns the store, which is selling all the store's assets and name to us - however the corporation will continue to be owned by the current owners, just without any assets.  Our new corporation, which we've already filed and registered and assigned a DBA - is the new entity which needs the lease :(", "replies": [{"id": "e7f7yot", "text": "Then you're doing it wrong. You need to purchase that corporation, so nothing in the lease changes, just the ownership of the corp.", "replies": [{"id": "e7fd4t5", "text": "We're doing it this way so it's an asset sale, which will greatly benefit our taxes while we pay off the store over the next five years by making all the loan payments tax deductible. \n", "replies": [{"id": "e7fdced", "text": "I understand the financial reasons for doing so, but you're potentially screwing yourself on the lease, and every other utility the business has (merchant accout, internet, phone, security, etc.)", "replies": [], "depth": 7}], "depth": 6}, {"id": "e7fdrnw", "text": "OP could possible also sublet from the current tenant. Depending on if the lease allows for it. ", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "e7esf6q", "text": "Wow. Not trying to be a jerk but why wasn\u2019t this the first thing you did? Instead your getting advice from the people selling the business.\n\n-\n\nDo you have any clue what you\u2019re doing? What to look for?\n\n-\n\nI would advise you to stop immediately and find independent counsel to represent you. If you can\u2019t afford it, you have bigger issues.", "replies": [{"id": "e7ewz1v", "text": "Agreed. If you can\u2019t afford a lawyer to prevent you from getting crushed, you shouldn\u2019t even be in business in the first place. ", "replies": [{"id": "e7exlcg", "text": "Pretty much", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]