Two years left on 5 year lease. Building was sold. Lease calls for tenant to pay property tax. Property tax way up after sale. We are being ...

Question

Two years left on 5 year lease. Building was sold. Lease calls for tenant to pay property tax. Property tax way up after sale. We are being asked to pay supplemental increase for 2014 and 2015. In addition, increased tax from here on. Do we have a legal argument? Thanks, Randy

Answer

This really depends on the terms of your lease agreement. If you are obligated to pay the real esate taxes with no exception, you are likely responsable. You were fortunate to take advantage of the low real estate tax rates available for the prior owner, but are now forced to pay at assessed market value. This a frequent area of negotiation in commercial leases, and it appears the issue may not have beed addressed or discussed specifically wher you executed the lease. Be sure your read the tax provision however. It may have been addressed specifically and your lease may provide some protection.

Answer

Most likely you do not, unfortunately. It would take a review of the lease to be sure.

Answer

You may possibly have a legal argument for getting out of the lease because of changed circumstances, especially if you are having trouble paying the higher assessment. I'm guessing, though, that you want to remain where you are.

You really should have a competent real estate attorney in your local area review your lease. He/she can read the terms of the lease agreement and advise you on exactly what your options are.