Unfair Laundry lease with shady company

Unfair Laundry lease with shady company

Real Estate Investor · Kansas City, MO · Member since 2014 · 7 posts · 2 votes

I recently bought a 6-plex and there was a washer and dryer in the building. Nothing about any contract or lease was mentioned by the seller at the time of closing, and admittedly, I didn't ask what the deal was with them. Now Jetz Service Co. are refusing to remove their washer and dryer from the building and threatening me with legal action if I don't give them building access. The guy from Jetz sent me a lease signed in 1998, by someone who owned the building before the company I bought it from, with a 25% owner /75% Jetz revenue split. He claims it's still valid and in fact just renewed last September until 2018 (automatically renews every 5 years). I had never seen these documents before he sent them, was never informed of the "lease", and have no interest in doing business with the company, mostly due to the guys attempts to threaten and intimidate me into signing documents confirming the validity of his "lease", but also for the fact that the 25%/75% terms are awful. It would be a big money loser for me.

I also recently found out that the previous owner never received any payments from Jetz. Jetz claims that this was because the owner wouldn't sign anything from them, and they tried to send payments, but they were returned as undeliverable. So for at least a year, no payments have been made on their "lease". I am currently asking for proof of these "non-deliverable" payments from them.

I am getting ready to do major renovations on the building, and I don't want to be liable for any damage to the machines that may occur. What is the best way to make them pick up their machines and keep this from going any further? I really don't need the legal expense right now, but it sounds like these companies make a business of being shady and forcing this stuff on unsuspecting property owners.

Thank you! I'm a new user of this site by the way. Glad to know there are helpful people out there!

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Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
12y

Further thought. Accept absolutely no payments from these scumbags for anything, as that may be interpreted as accepting the lease. Otherwise, kick 'em to the curb. They seem to be willing to call your bluff (at least until their equipment is sitting on the curb), so don't bluff, just do it. Right or wrong, just my opinion. As for the "title co. issue"...no recorded lease means no title issue, no enforceability on third parties, IMO.

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  • Roseann KoefoedPro Member
    Rental Property Investor · Frankfort, IL · Member since 2020 · 26 posts · 23 votes
    2y

    I just found this post as it is relevant to my current situation. I just closed on 24 units in Illinois. I found out at the closing table that the Seller was passing to me a completely unfair laundry lease with Jetz. 10-year auto renewals if I don't provide 365 days' notice to cancel.


    Seller had lied in person when touring the property that they "liked" the arrangement with Jetz. After reviewing the Jetz contract at the closing table, I called the sales broker pissed and they admitted that they had also tried to get out of it but could not. I negotiated $10k in credit to cover my legal fees to fight the contract.

    I contacted Jetz this week and it's clear they are not interested in a buyout or being reasonable in any way. So if I remove their machines, they will sue me for "breach of contract". I want to buy them out because they are only making about $50/month anyway. 5 years left on lease, so $3000 would cover it.

    I believe that their lease falls in the "unconscionable" category which is a means to fighting a lease. But looking for advice.

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