Is a commercial business lease bw family members prior to a power of sale on the land still legal/binding?
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My uncle and aunt got hammered last year on their variety store/gas station business and fell behind on their payments on the property (which they also own). The mortgage company indicated they will do a power of sale on the land at the end of March if full payment is not made. There is no way the two of them will be able to do this and it will kill me to see them basically lose everything while in their early sixties.
My friend had an idea though which consisted of me signing a lease to for the business portion because the commercial lease will have to be upheld by the next owner. This way, while they will lose the land, they will able to make a living by running the business that I’ve ‘leased’ from them, the original owners.
[B]I know that normally this type of agreement between family members is fine here in Ontario but with my relatives’ financial situation and the fact they already knew a power of sale would be coming, would this type of lease still be binding/legal? [/B]
Will the mortgage company challenge this, especially as we know the company would like to sell it to one of their clients (who we know want a lease-free purchase).
This is quite URGENT as all the lawyers, mortgage company, has been screwing over my uncle and aunt over the past year, I desperately want to be able to provide some way to help them.
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1 Comments
April 16th, 2009 at 2:08 pm
It would be viewed very fraudulently. This is a situation that you need an Atty to look at or you may create even worse problems for them than they have now.
You bet it will be challenged.
Look reality check your parents can not afford the business they have or they would be making their payments so YOU should be trying to help them cut their losses instead of prolonging the inevitable.
Good luck but ONLY try anything after a lawyer okays the deal.