Help Me With Sign Nevada Banking Month To Month Lease

Help me with industry sign banking nevada month to month lease

hi guys this is deepak i'm here in sanjeev ji office although i'm in a different room and sanjeev is in a different room and we have a surprise guest with us joshua he's a business attorney and we have some great questions for him as to how you can deal with your long-term leases your commercial leases that might be getting impacted right now due to this pandemic so sanjeev you want to talk a little bit more about the situation that many of our clients facing right now yes yes definitely a lot of our clients they call in our office they are saying that we i'm not going we're not going to offices our employees are working on off the like from home uh most of those clients are in 90 businesses and they don't need an office right now they feel they don't need those offices rents are very high the landlords are not helping them because they're saying that we have a lease agreement why send us a bank statement send us those uh financial record to make sure to to see whether you really need some financial uh some settlement otherwise they are not helping them and the rents are very high in california bay area the rents are primarily very high and people of the clients are feeling that pinch of paying the rent of course many of our clients got a pvp loan but that people loan was uh for mostly into payroll went into payroll so nothing was left for the rent payments and this is pandemic it's just going on and on so there's no ending inside so people are worried now what to do with those friends so that's what that's where joshua the business attorney i was able to connect with him last week uh fortunately and and i'm really uh blessed with joshua coming on the show and trying to give some some hints some ideas some options for clients so joshua i'll let you answer that question now people who are stuck in leases are there any legal remedies for these people is there anything they can do to avoid rent or perhaps even terminate the lease if needed there are and let me just take a second to further introduce myself if that's okay so my name is josh borger i'm a partner at berliner cohen a law firm in san jose and i have written and spoken on this topic there the answer is there's no clear cut answer there's no that is there's no one-size-fits-all for people in the law this is going to fall under the doctrine of commercial frustration and what that means is there was a frustrating event that was not foreseeable to any of the parties the landlord or the tenant that has destroyed the value of the lease and whether that lets you out there was a bill in the state legislature that was trying to deal with this that bill is essentially dead it didn't make it out of committee about a couple weeks ago and so now since they're i'm not aware of any bill right now in the legislature dealing with this it's going to be up to the courts currently there is a stay of commercial evictions the california judicial council which governs the courts has an emergency rule but that stay only lasts for i believe three months after the governor lifts the emergency so then it's going to be up to the courts for what they want to do i've gone through the case law through world war one world war ii and other similar situations trying to analogize to where we are and so here here is my take then based on that case law of um the things you're going to want to look at to decide whether you can get out the first is look at your lease and see everyone asked me my lease says the purpose was to for example have a restaurant and i can't have a restaurant inside therefore do i get out of the lease and the answer to that would be no all leases have a purpose it'll state but the purpose doesn't mean that you have to do that under the law you are allowed any reasonable purpose to operate even though it says the purpose is for example a restaurant so you'd want to see if there's a distinction between the purpose and whether your lease says for example again you have to operate a restaurant if it merely says the purpose then the fact that you can't operate it wouldn't get you out because you don't have to have a restaurant you would have a reasonable other purpose and then you would have to debate what that reasonable purpose is if it says you have to have for example indoor dining and operate a restaurant and you can't then that should fall under the doctrine of commercial frustration we we live by example lawyers let me give you an example why i went back through the case law dealing with wars there was someone from world war ii who leased um what was a hotel and they intended it to operate as a hotel for japanese citizens japanese ancestry in this area known as little tokyo in l.a but because of the evacuation of the japanese they were not able to do so so they went to court and said they should be out of the lease and the court said no while that was your purpose it was not an agreed upon purpose by both sides it was not agreed that you would have a a hotel that was leased only to people of japanese ancestry so that didn't get you out but if the lease had required it and you couldn't then that may have gotten you well so the first thing you're going to want to look at is that another thing you're going to want to have to decide is does the stay-at-home order any of the government restrictions make your lease less profitable or entirely unprofitable i'll give you another example from a case from world war ii someone leased a neon sign and they were allowed out of that lease because there was a um law that prohibited them from having neon signs at night because it told the enemy where the land was so that essentially that lease had no value so the court let him out under the doctrine of commercial frustration now there was a different case where someone was leasing a car dealership and because of laws during the war which limited the production they weren't able to make as much money as they had hoped the court said that did not terminate the lease you still had some value just not as much as you had hoped now let's draw that analogy to today's setting of restaurants let's stay with that you could have a restaurant that only had had sit and dining and you were not allowed to operate that would be closer to the neon sign where you should be allowed out of the lease under commercial frustration because you had no value if you were allowed takeout or you were operating takeout then i think you're closer to the second case where you had value you just weren't making as much as before so in that instance i don't think the court would let you out now the question then becomes some people are then going to say well i would be better off just not doing takeout at all and then getting out of the lease because i don't think i'll survive i don't know if the court would let you go back in time and do that if you were operating but you simply decided not to i tend to think the court wouldn't but that's an issue that we'll have to decide the other issue that's going to come up for people and keeps coming up for the people that are retaining me is whether or not this temporary period where they weren't able to fulfill their lease where they weren't able to operate justify terminating the lease for the temporary period likely would get you out of paying the lease depending on the language of the lease there is a question and there's conflicting law on this of whether not being able to operate your lease for a set period of time is essentially terminating the lease and again i'll give you an example there was a case from um world war ii where they were actually fighting them back to world war one where there was a submarine menace is what they were calling it and people who had shipping couldn't leave the harbor under the law because it wasn't safe to do so and even though they knew the war was not going to last forever they didn't know when it would end and so was deemed permanent and as a result of being deemed permanent the lease was terminated they were allowed to be out of the leaks here coming back to this analogy you could argue this is going on longer than anyone expected covet 19 and we don't know when we're really going to get back to working in a in the normal environment an argument can be made that because of that just as the war example you can get out of that lease i don't know if the court will accept that argument um there is again conflicting law on this matter but you could certainly make that argument we don't know when this will end let me ask you this i'm assuming i don't know if there's any statistics out there are these kind of litigations already happening out there well right now there is a stay in commercial evictions from the judicial council of california who governs the rules of the courts has a stay so you can sue for breach of contract if somebody is not paying rent um but you will not be able to physically evict them right now this moratorium i believe was for four months only right they're going to extend this monitorium beyond four months well right now there's different moratoriums you have local governments have their moratoriums um right now because of the declared emergency and i'm not talking about the moratorium from the state but the governor has declared a state of emergency so this moratorium is from the courts into the judicial council which is very different than any moratorium that was issued by the governor or by the counties and this moratorium governing the courts it's a court rule states that i believe it's for three months that currently you cannot have a commercial eviction and you cannot have one for i believe it extends for three months after the governor lifts the emergency so even if for example there were a local moratorium and that local one were lifted the courts who would have to issue the judgment or order vacate ordering this person to vacate you're not going to get that at this time so joshua let me ask you the same question in a different way for example uh people who are right now struggling in paying their leases what do you recommend they should do should they wait until this whole thing is over and then kind of decide because this pandemic might actually force a lot of business owners especially the smaller ones into bankruptcy so what should they actually do today right and that's important to remember that there are a lot of businesses that even when the pandemic is over will never recover it's unfortunately but they will end up in bankruptcy at this point i can't say that i recommend to any client that if you owe rent that you breach a contract um that said if you do breach it i don't see how a court can issue an order um vacating you what i would recommend under these settings is that the landlords and the tenants are simply going to have to renegotiate the lease the landlord still has to pay the mortgage the tenant still is going to have to pay something to be there and i think that they can both still be successful if they lower the amount of rent now it has to be something where the landlord can still pay the mortgage but everyone is just going to have to negotiate something new otherwise you're waiting to see the analogies that the court draws from previous wars so basically uh uh whether the the the commercial uh tenants like it or not uh they have to honor this uh their rental agreement they say there's a contract in between them so if there's a financial hardships if they can prove it then they can have some kind of renegotiation with the landlord if not they have to come they have to continue doing that whether they come to the office their employees come to office or not come to the office uh there's no other way there's no option right well there is another option let me let me clarify if a tenant believes that given what i've explained that their lease should be terminated they can terminate the lease and hand over the keys okay if there is a dispute about this you can always sue for what is called declaratory relief that is you believe given what i said that your lease has terminated the land lord says no you're wrong it did not and i will come after you for i can still sue you for rent that is owed you've handed your keys thanks for the keys but i can still sue you for rent because i didn't terminate the contract your landlord could sue for breach of contract you could also sue the landlord because you want some assurance that you're not wrong you can sue for what's called declaratory relief you want the court to state is the lease terminated or is it not terminated you can take that initiative versus just continuing to pay rent okay so there is at least some option for the uh and this one right in this case actually this this makes actually more sense to me because some of these uh business owners might be paying 15 20 000 a month in rent and if this pandemic goes on for another 10 months 12 months i mean you're talking about huge pending liabilities it's better to take care of them now um and then maybe like you said maybe you kind of work up with that dual strategy where you negotiate with the landlord and take care of this that look i can't afford to pay rent until this thing is over and and if this thing is over then we can start all over again right you could do that or there's something called mitigating damages so if you think you're right then vacate hand the landlord the keys and say in your opinion it's terminated and then if the landlord disagrees you can sue and try to get the court to decide that's your assurance the court may decide for you um the landlord had a duty then to mitigate their damages is what it's called they wouldn't be able to just sit there wait until the end of the lawsuit and say well that was two years ago you owe me two years of rent they would have a duty to try to find another tenant to lessen their damages um now that's tricky in this situation because i would imagine there is not a whole lot of demand for commercial space at this time so they may try but that likely isn't going to go anywhere so just a simple uh putting in a simple way so if if the if the if my client is working from home their employees are working from home just because they are working from home is not the way to get out from the lease that's that's fair just because you're working from home the lease does not automatically terminate and the exception to everything i'm saying is you have to read the lease every lease is going to have its own wording i'm giving people general law on these topics but people are going to want to have to read the exact language but i can't fathom that elise is going to say because somebody works from home the lease is terminated people can work from home in this valley people work from home all the time all the time so if the client has to have to contact you on this one uh can you give us your details and contact number and how to connect with you sure um again my name is josh borger b-o-r-g-e-r i am a partner at the law firm of berliner cohen www.berliner.com my email is j-o-s-h dot i'm sorry j-o-s-h-u-a dot b-o-r-g-e-r at b-e-r eerliner.com the general phone number here is 408 286 5800 and just asked to speak to josh borger and guys i will also put the josh contact information below this video so you have easy access to that information now josh before i let you go i have another quick question for you just to if you don't mind for two minutes give us a quick market update as to what kind of uh issues are you seeing arising right now so that way business owners can be a little bit more aware of what they should watch out for on both sides of the fence where should they protect and where should they attack with respect to just generally how the law is changing right now or things to look yeah like what kind of situations you're seeing because uh i'm saying i'm sure there are people out there who are probably trying to take advantage of business owners and maybe suing them for that reason so how can they protect themselves what actions can they take to be a little bit more you know pre-active right now basically and then and then anything else that you might be seeing out there in the industry right now sure one of the big disputes right now is whether business interruption insurance which is proper y insurance is going to cover losses due to covet 19. right there is a lawsuit out there thomas keller filed on behalf of the french laundry in bouchon and a lot of people are waiting for that i actually don't think that's going to be relevant to most people because thomas keller's policy is a very tailored policy to someone who has very deep pockets it's not the policy most people have so my recommendation would be for people to try to get past this is to tender business loss claims to your insurance company and have your policy reviewed i think there are arguments for why you should be allowed coverage for business losses even in california due to coven 19. i have some articles that people want to email me that i can send to you there is certainly case law and argument against it we're all going to have to wait and see what the courts do but i would hate for someone to have a claim and they just didn't timely make that claim so the first thing i would do is tender to your insurance carrier under your property insurance policy to try to claim business losses okay yeah that's definitely on everybody's mind what else is going on um there has been an increase in wire fraud which is another topic that i've had to litigate because and hackings because everyone is working from home and people were not ready to have this type of private information going back and forth from their home to their office and so the there has been an increase in wire fraud so be very careful in that in phishing emails i had a client at one point that lost over four hundred thousand dollars in a wire fraud scheme i was able to claw the money back it had gone all over the world that was not easy and so i would caution people to be very careful in the phishing scams um anyone who is a fiduciary anyone who deals in large sums of money lawyers accountants any business people those are the ones they're targeting wow would be good to know good to know about that so definitely uh joshua thank you for coming on to our show and uh video we are going to telecast this to our for the benefit of our our clients and and whoever comes on our website and we'll do we'll do more things like this in the coming weeks right to deepak yeah absolutely i think josh has a great library of other important topics that he will share with us that might be of some benefit to some of you guys so we'll be happy to share those with you guys and then if you guys have any questions uh for josh you can definitely reach out i will put his contact information below the video so you will have easy access to him um and if you have any question definitely reach out to us we are still open we are still working as you can see sanjeevji still have a lot of files on his desk so he's still filing taxes so if you have any questions concerns with that definitely come up we do have a webinar coming up those of you guys who are watching this video if you have not registered for the webinar i think about 80 or 90 registration so far we still have another couple hundred seats available so if you would like to register for that go to centicpa.com and write on home page you can register for that webinar that's going to happen next month where sajid will talk more about ppp loan he will talk about what has changed in the new stimulus package uh and any other market updates what is actually happening today what's relevant so i hope that will help you thank you all right once again thank you so much for watching this video guys i really appreciate it and i'll see you next time