What happens to NNN lease business owner/landlord if National Credit Tenant Closes Location or goes Bankrupt?

Does the lease still get paid out for the obligated period?
In Property Management - Asked by Scott F. - May 7, 2009
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Answer(s)

Michael T.
Broker/Agent
Chicago, IL

Depends on what the lease says

May 7, 2009
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Scott F.
Owner/Investor
Bellevue, WA

*Michael T.*
What clause(s) should I be looking for exactly?

May 7, 2009
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Paul S.
Broker/Agent
Glendora, CA

Depends on what the lease says but in general just closing doesn't get them off the hook. A closing, while not good, may not stop the rent and the tenant may secure a sub-tenant for the property(look at the lease). A bankruptcy on the other hand can be really bad for you. If they reorganize under bankruptcy they will probably get off the hook on the lease if the site is not profitable? If they go chapter 7 they are out of business and gone. As a landlord I believe you are considered an unsecured creditor (check with a bankruptcy attorney) and therefore one of the last to get paid and probably not at all. Hopefully you have a good location that another tenant will be interested in (although highly likely you will get a lower rent which will lower the value).

May 8, 2009
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Gregory G.
Broker/Agent
San Francisco, CA

Depends on the lease... but most likely they would have to keep paying even if the store goes dark.
http://www.gregorygarver.com

Sep 1, 2009
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