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In the four years since Devon started Yard Tech in Florida, he incorporated the business, purchased two trailers and two pickup trucks, rented a storage facility for his trucks and equipment, and hired 2 full time employees. Yard Tech services include mowing, edging, mulching, planting, pruning and a variety of landscaping services. Yard Tech also offers pool cleaning services for a few clients. As expected, Devon and Yard Tech experience several scenarios while conducting operations. On December 31, 2013, Devon entered into a 5 year lease for a storage unit with Rudy. In September 2014, Devon discovered he needed more space and found a great deal on a storage facility with indoor and outdoor space for his vehicles and equipment. Instead of leasing, Devon purchased the entire storage facility with the intention of renting out some of the space to help pay for the purchase. Devon knew that Rudy would not let him out of the lease, so he assigned his rights under the lease to Girish on January 2, 2015. Girish used the storage unit and made payments for five months. Without Rudy’s or Devon’s knowledge, Girish vacated the unit end of July without paying for June or July and still owing the remainder of the rent for the lease period.
When Devon purchased the storage facility, he obtained a mortgage from Regions Bank
Which party is liable for the remaining rental payments? If the party liable for the debt does not pay and Rudy obtains a judgment ordering payment from that party, what are Rudy’s options for seeking payment?
Expert Answer
The facts which are apparent from the question are:
- Devon is under a lease obligation to Rudy for five years from Jan 01, 2013.
- Devon assigned the lease between him (Devon) and Rudy to Girish from January 02, 2015, apparently without informing Rudy
- Girish had paid the monthly lease amount till May 2015.
- Devon has the mortgaging rights of the facility that he purchased from Regions Bank.
If there is no exit clause with any condition of advance information to Rudy, then Devon is responsible to pay the balance lease amount, to Rudy starting from June 2014.
Rudy may file a civil rights suit against Devon for getting the lease amount for the period starting June 2014 till end.
If Girish does not get her balance due lease amount and Girish or Devon do not pay her the lease amount, then Rudy can move the court to force Devon to pay the balance lease amount through mortgaging the rights of the facility that he had purchased, through the Regions bank.
If Devon has a written agreement with Girish about the sub-lease of Rudy’s facility he can get the order from the court that Girish should pay for the default that he has done.
As it is apparently that Rudy had not been informed about the sub-lease of her facility and Devon and Girish conspired together and infringed the rights of Rudy, as the owner of the facility, by not informing her of the deal between them, Devon has committed another default.
Rudy shall press her claims for immediate repayment for all the balance period of the lease and release of the facility to her, from Devon.
The court can also take a position against Devon and Girish for committing a fraud of sub leasing the facility, which they do not own and Devon has no rights to carry out any such deal, unless he has been authorized by Rudy.
