A friend of mine who is not a member here is having a serious land lording issue. He recently purchased an apartment building that has several units and tenants. There is a laundry room with washing machines, but the machines are actually owned by a company who services them, and only gives my friend a third of the proceeds. He would like to put his own machines in the room and keep all the proceeds. Apparently the washing machine company already had a long term lease with the prior landlord to lease that space for their machines and they do not want to give that up.
Does he have any recourse?
If the laundry vendor has a valid lease, under most circumstances it has to be honored by the the new owner. Find out more about the purchase terms. And the lease.
What type of purchase? Was there a previous foreclosure? Any escrow? Has your friend seen the signed lease and what are the terms? Can he buy them out?
I do not have any experience in this however I would think that the contract would be with the owner who signed the contract not the property. I guess ot would depend on the setup and size of complex but that is my takd and avenue I would pursue or investigate.
The lease for the laundry room is just like any other lease that you would get when you purchased the property. You are bound by the terms of the laundry lease if valid. Be careful with the lease and read it very carefully to see how and when you can send notice to terminate the lease. There is a very small window and specific rules must be followed. I have laundry leases with 2 companies at this time that I received when I purchased apartment buildings. One company I enjoy, and the other company is terrible. I can't wait to get rid of them.
The lease most likely followed the property. However, sometimes there are legal loopholes. My advice would be to obtain a copy of the lease and review it with an attorney.
This lease should have been disclosed when your friend bought the building and he should have read it. If it was in effect and he did not get a copy, it's obviously a contractual disclosure issue.
My experience is that the laundry companies give you some window to cancel the lease, though, after a property sale. I decided to cancel my lease with a laundry company and bought the in-place used machines from them directly. They are a business after all and should deal with your friend rationally.
This fascinating topic has been discussed on many previous BP threads. There can be a lot more to it than meets the eye. Do a BP search for "laundry lease" as you will find more info. Here is one of the more recent threads on this topic.
Hope your friend is dealing with one of the more reputable laundry service companies.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.