Stuck in an unfair laundry lease

[Roseann Koefoed]

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.  Was originally signed 15 years ago, two landlords ago.

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 had to close because I need the property for tax purposes.

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.  Although I really don't understand how the machines are only generating $100/month (of which they keep 50%).  Just doesn't make sense relative to how much we make in other buildings in the same area.  Separate issue.

I do believe that their lease falls in the "unconscionable" category which is a means to fighting a contract in court. But looking for advice. I really need control of the laundry income because it impacts the NOI for my refi next year.