An interesting thing happened on the way to a closing.
We are 5 days away from finalizing a transaction for the sale of a small sandwich shop, and I get a call from the buyer… but I digress
My seller’s lease was up at the end of February and he was ready to get out of the food business. He is young, the business is taking up too much of his time and he wanted to go into other endeavors. Nice little business, well priced and I had a buyer that fit the business like a glove. We had a signed sale and purchase agreement with earnest money, and due diligence was under way. Like I said, 5 days from closing. The only thing missing was a lease agreement between buyer and landlord. Talks were underway and a verbal agreement was being considered by both parties, but nothing finalized.
Well the seller told the landlord he was leaving within 30 days (unknown to me), landlord got nervous, did not really like the verbal offered by my buyer for the lease, so they went looking for a tenant and immediately found one… at their preferred price.
So I get this call from my buyer… “The landlord leased the space to somebody else!!!” Monday morning no less. In one fell swoop, buyer looses a business, seller looses a sell and broker (that would be me) looses a commission.
Now I can’t blame the landlord (actually a management company), they were just protecting their property owner, fulfilling their fiduciary responsibility to get the best tenant at the best price for the space. And after all, the seller/business owner did give them his 30 days notice. I suppose the blame if any, falls on me, the broker for failing to adequately control my seller. The seller wanted out, I knew he wanted out and he did not want to sign a lease extension. I should have sat him down and told him to not under any circumstance, give his notice to the landlord. Who would have thought?? Well anyway, lessons learned.
So what is the moral of this story?
No Lease, No business!