Commercial Contract - HOA Subordination

Commercial Contract - HOA Subordination

Member since 2019 · 1 post · 0 votes

I have a multi-yearcommercial lease on a retail unit. However the building in which this unit is being located is being sold to a developer who will likely tear it and rebuild a large multi-story building. Location is critical to our business and our lease is multi-year. However the lease has a Subordination clause "This lease and tenant's leasehold interest areand will be subject, subordinate, and inferiorto: i) the rights of any owners' association affecting the leased premises or Property "

Obviously location is critical to us (as is for almost any retail business) and there is substantial cost of move. So while the above clause says that HOA can decide to sell the building and we cannot prevent that. But isn't it that we would still have claims of harm against existing or new landlord? Thoughts?

Location is in Texas. If you have experience in this area and can help we would be happy to hire a competent attorney. Thanks

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  • Member since 2018 · 28 posts · 3 votes
    7y

    I haven't seen your lease documents, and this isn't legal advice, but the section you quote states that the tenant's interest is subordinate to the HOA rights. That means that the HOA rights are superior to your leasehold rights. The owner is usually the person or entity that has the right to sell the building, and tenant's rights are usually subordinated to the owner's rights, as well. This is to make sure the owner can sell the property if they want to. Also, have you been harmed? You need to demonstrate harm to have an actionable claim.


    Jenna Zebrowski

    The Law Office of Jenna Zebrowski, PLLC

    "Investor-Focused, Series LLC Friendly, Commercial Real Estate Savvy"

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