[RPPTL LandTen] Assignment of Lease - Can the Assignor evict the Assignee?

[Drobner, David S.]

For whatever it's worth, in franchise situations, the issue typically has some sophisticated focus; often I end up in a long negotiation with the franchisor on its "rider" or similar document, expressly dealing with its rights to cure if it wants, get all notices of default, get extra time to decide what to do, to take-back and resume occupancy and operation if it wants to, to then re-assign to another successor franchisor similarly qualified (and restrict its obligations to its period as tenant with no assignor-surviving-liability unlike a typical assignor post-assignment), or otherwise to enter and de-brand. The nuances of that negotiation can be involved, especially the core LL wish for indemnity against getting sucked into a possession dispute between the franchisor and franchisee. There's a reason why these players go to all the trouble to do that - to avoid the mess here... a real pain.

From: landten-bounces at lists.flabarrpptl.org [mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Eric Jacobs
Sent: Thursday, May 09, 2013 9:12 AM
To: RPPTL Landlord Tenant Committee
Subject: Re: [RPPTL LandTen] Assignment of Lease - Can the Assignor evict the Assignee?

I don't believe that the Seller can re-enter without a court order and would not encourage them to do so.  I would seek preliminary injunctive relief if they are serious about getting back in their in a hurry though they'll like have to post a bond.  In such case though I think it would be more in the nature of taking possession sort of "on account of" Buyer and not resuming occupancy as Tenant per se.

Also, once the lease is assigned unless there is something in the lease that allows the Tenant to resume its occupancy, I'm not sure what basis the Tenant would have to resume occupancy.

Sounds like an interesting mess.  Interested in the thoughts of others

Eric Jacobs
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From: landten-bounces at lists.flabarrpptl.org [mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Anthony J. Horky
Sent: Wednesday, May 08, 2013 4:48 PM
To: 'RPPTL Landlord Tenant Committee'
Subject: [RPPTL LandTen] Assignment of Lease - Can the Assignor evict the Assignee?

Hello Members: I have a unique fact pattern and before I file suit, I'd be interested to hear other member's opinion:

Facts:

Tenant operates a retail establishment.  Tenant sells its "business" and takes back a promissory note and security agreement.  Tenant assigns its rights in the lease to the purchaser by way of an Assignment of Lease and Collateral Assignment, which provides, inter alia, that upon default in the note or security agreement, and after 10 days written notice to cure, seller/tenant may re-enter and take possession of the collateral and operate the business through the unexpired term of the lease. Buyer defaults on promissory note and will not peaceably surrender possession. Buyer remains current on rent payments to landlord.

Issue:  Seller/tenants wants to exercise its right of re-entry and sue on the note.

Causes of action:  Foreclosure of security agreement, breach of the note, breach of personal guaranty and  Declaratory Judgment that (1) buyer is in default, (2) tenant/seller reserved right of re-entry, and (3) clerk to issue writ of possession.

Question:  Does anyone have an opinion on another type of cause of action to adjudicate seller/tenant's right of re-entry?  Tenant, as assignor, remains liable under the lease, but I see no way to evict or remove the tenant other by way of the remedy given in the Assignment by way of a declaratory judgment.

Thank you for your time.

Regards,


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Anthony J. Horky, Esquire

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