"We lost our lease" when they own the store?

A local store is closing a location and is holding a “lost our lease” sale. This wouldn’t be a problem except that they owned the store the last time I checked. Assuming that they haven’t sold the store and released it, is it legal for a business to lie about this, or to “lease” a location to itself (possibly through a wholly owned subsidiary), then terminate the lease?

I realize that this depends entirely on state and local law; I’m more interested in the general case (if there is such a thing in law.) Our state prohibits “going out of business” sales unless the business actually closes shop, but the business is only closing one location and isn’t going out of business.

As a commercial real estate agent I can think of one scenario where they might possibly make this claim accurately but it would be stretching a point. It is not uncommon for a the corporate entity of a business or partnership to lease the space occupied by the business from the owner of the property who also happens to be one of the main stockholders of the business.

In this context, depending on the structure of the lease and how tenancy is being intepreted the “lost our lease claim” could be made accurately if not entirely honestly.

Could it also be a lease-hold? I know this is common in Hawaii with the Bishop Estate owning so much land but I don’t know how common it is on the mainland.

Essentially you own the buildings and improvements but you don’t own the land.

astro, after thinking it over for a while, you may have nailed it on the head. This is an old family business. The original owner “retired” a few years back but still keeps an eye on how the business is run. It is possible that he personally owns the property and may be “cutting off their lease” to either facilitate their closing the store or to force the current management to see things his way. Unfortunately, our local appraisal district’s server is down, or I would check this out.

obfusciatrist, as much sense as leasing land can make, I doubt that they own only the improvements. Even including time to build, the store hasn’t been there for a round number of years (i.e., 50, 75 or 100 years.) Then again, maybe the appraisal roll will show me to be wrong come morning.

It would be a breach of the Trade Practices Act in Australia if they are not losing their lease.

There used to be a shop when I was a child that got around the then current trading laws by calling the name of the owning company “Closing Down Sale Pty Ltd” Needless to say, the name of the company was displayed prominently. Would not be allowed now, due to the above act.

It would be against the Deceptive Trade Practices Act here in Texas to lie about that for a sale (Tex Bus & Com Code sec 17.46).

Maybe they couldn’t make the mortgage payments, and the bank is repossessing, and “Lost Our Lease” was the simplest non-embarrasing way they could think of saying “We Gotta Move”.

This is one of those things thats best answered by calling the store & asking them. Then let us know.

I’m assuming you mean they own the building as well as the business. Is that correct? If so, then the most likely scenario is probably that they were losing business, sold their building with a leaseback to raise capital, and now no longer have the control over the physical plant that they once did.

–Cliffy

There was a store here that had a “lost our lease” sale even though that particular location was not going out of business. The rationale was that they had lost their lease on their main warehouse and had to move a lot of inventory quickly.

That’s not the same situation you mentioned, but it goes to show a business can find lots of reasons to hold a sale.

The old man personally owns the property. He may be retired, but he can still call a few shots in the family business; I assume that this is what he is doing.

There is a business that I pass twice a day, to and from work, that has had either a ‘going out of business’ sale or a ‘lost our lease’ sale for over one year.

Darq: “Hey, look. Another Persian carpet store. Like this town needs another one…”
Darq’s Mom: “Nah, it can’t be a REAL Persian carpet store.”
Darq: “Why not.”
Darq’s Mom: “Well, there’s no mention of it going out of business.”

:BaDUMbum:

(Love ya, Mom!) :smiley:

A friend of mine owns a bookstore, but doesn’t own the building the bookstore is in. Her lease has recently expired and she’s trying to sell the inventory to get out of the business completely or to make it easier for moving to the next location.

Maybe that’s what your “We lost our lease” business is doing.

Hi…found this old thread via Google but I had the same/similar question. I have seen quite a few closing businesses put “Lost our lease” on their signboard. It makes no sense: why would an owner revoke or not renew the lease of a business that’s making the payments? This leads me to believe it’s a euphemism/excuse meaning “our business failed but we’d rather not admit it.” It seems to be common practice but I was just trying to confirm if it’s indeed just a ruse.

I know a business owner who owned the building but leased the land. When they went out of business, they were able to sell the business separately from the land.

Is this the oldest zombie thread ever? Do we have a record here?

NetTrekker, welcome to the SDMB.

We prefer that you start a new thread rather than resurrecting one that’s nine years old where the participants are probably not around and watching it anymore. I’m going to close off this old one – feel free to start your own.