Buying/Selling restraunt problem

[annea]

ok. Heres a situation. My parents bought a restraunt in like March 2006. We had the business but it didnt go too well so my mom sold the place to her neice(Jenny). My parents wants to remove their name from the lease at that time, but the landlord said they can't because we had the business for only like 3-4 months . My parents sign the lease for like 5 years or something like. But the landlord also says that they can remove their names after like a year or so. The restraunt is under my mom's neice(Jenny) name, but the lease is still under my parents name. About last month I called the landlord and ask him if my parents can take their name out, he said they could but right now Jenny owes them some money for late rent and stuff so they cant take it out until Jenny pays for it. He said we have to talk to them and see what happns. Right now my mom and her neices doesnt get along. My mom worked w/ them in the restraunt at first but then they got into a fight and yea..I mean dont we have the right to remove our name from the lease since?.....i dont know much about business and all this stuff.. what can my parent do to remove their name from the lease? I heard that is a serious issue if your name is under the lease. Can they sell the restraunt while my parents name are there? Any suggestions? Thanks for reading and helping!!!
PS: Money really turn people against each other!

 

[noungning]

i'd suggest u go to seek a lawyer because something to this extent shouldn't be left unhandled for long because u cousins might create a bigger problem by not paying for anything and then selling their business off. i believe u can sell off the business without the lease because technically u are only selling the 'business' and not the building... and the landlord doesn't care who owns the business, he just cares who pays him rent... just my opinion. i can be wrong. but i still think u should see a lawyer.

 

[annea]

darn it.. problem after problem for my family...errrr... thanks Noungning for the suggestion.. I really dont know anything about business and stuff....I knew it, my parent shouldn't bought that restraunt at the first place...this is really serious. those people i dont even consider them cousin..they better pay for all these crap because when my parents had the place, they paid for everything and on time. thanks again!

 

[dfemc]

yeah, u need someone to review the lease contract. a lawyer is suggested. it depends on what ur parents agreed to or signed on in the lease contract. there should be a sublease clause or a LEASE TRANSFER clause, stating whether the lease is transferable or not upon the sell of the restaurant. if u can't afford a lawyer, u can also access awesome business counselors who have worked with real estate issues and some are even former lawyers who volunteer in the organization, SBA (small business association). so depending on where ur from, locate the SBA office in your town. http://www.sba.gov or specifically: http://sba.gov/localresources/index.html

i've been interested in setting up a restaurant of my own, and have studied lease contracts intensely, to avoid situations like this. so if u can access the lease contract from ur parents, i'd be glad to look over a few things for you. let me know. good luck.

 

[gs]

that why you should never do business with family and friends

 

[kumpangxruk]

yea they should have transferred everything to her name thorough a lawyer. my parents had a restaurant for 10 years and sold it when i was like in the 11th grade a few years back.

i agree...business and family truly does not mix lol...everyone is greedy!

 

[u00htg2]

So your parents set up the restaurant as sole proprietors and not s-corp or llc? Might be hard since they personally sign for a 5-year lease but there's probably some out clause and it sounds like the landlord is willing to take their names out. Can your parents just pay the landlord what your cousin owes, have him take their names out of the lease, and then try to get the money back from your cousin? I know, it's tough, but it might be the best solution at this point, because she may end up not paying the landlord even more in the future and your parents will still be holding the risk as it's their name on the lease. And if the relationship is really bad, your cousin might not have "good faith" to not get your parents in even more trouble.

Yeah, next time, try setting up a business as an llc or s-corp. So when you sell it, you sell the whole business and any contracts, etc. are in the business name and it all goes with the sale. There's more paperworks with setting up an llc or s-corp but it's worth it to protect yourself and your personal assets.

 

[annea]

Honeslty, im kinda confuse about whats going on as well...My parents are like BROKE.. since business didnt go too well and we lost a lot of money. I dont think my "cousins" would pay my parents back if they did pay the landlord the money that those people owes. Now they were telling my other auntie that they want to sell the restraunt. They didnt even tell my parents about it. We knew about it because my auntie called my mom and told her about it. Can they sell it? I need to get my dad to talk to those bitches and sees if they are willing to go see the landlord w/ us and talk everything out; like taking my parents name out of the lease, cuz thats the only thing that still has my parents name on it. They used my dads account for their PG&E and we didnt even know about it. They made late payments and stuff and thats how we found out...errrrrr...people are so mess up! hopefully my parents can just take their names out of the lease..thats my only concern..*PRAY*..thanks again ya!

 

[u00htg2]

Oh, bummer. With family like this, who needs enemies?

 

[annea]

hey dRockStar and u00htg2, I'll scan the paper(if i can find which one is it) and sent it to u guys ok? thank u all so much from the bottom of my heart. Ur comments and suggestions is really making me feel better . At first i was clueless but now kinda beginning to understand. My family are like broke and my dad owes so much debt because he open credit card accounts and stuff to use for the restraunt. SO sad. they thought they can make it and the worse is that they didnt even understand or know anything about business and the law. I was telling them this is not like in Laos u kno??? they expect me to know because i go to school! kinda pissed thta they would think like that. but at the end of the day they are still my parents and still try their best to support me us even thou our condition is bad. thanks again!!!! XOXO!