Commercial Landlords, be advised that the commercial lease governing the tenancy of your commercial income property is considered an “asset” that is subject to the Bulk Sales Laws which govern the sale of certain businesses, such as restaurants for example. See Cal. Com. Code § 6102(a)(1)(ii). Thus, a commercial tenant seeking to sell a business, including his/her interest in a commercial lease must list the commercial landlord as a claimant in the event back rent is owed. If a commercial tenant in a sale governed by the Bulk Sales Law owes back rent, the landlord would then be a creditor subject to the Bulk Sales Laws. Commercial landlords with claims on a commercial lease in a sale governed by the Bulk Sales law would hold an unsecured claim which is lowest in terms of priorities in terms of distribution considerations. See Cal. Com. Code § 6106.4(b).
If you are a commercial landlord or a commercial tenant with questions regarding your commercial lease, contact one of our Los Angeles Commercial Lease Attorneys today for a free consultation and case evaluation.