Legal Question in Landlord & Tenant Law in Illinois
Co-signer on business sold
I sold my retail clothing business last fall. However, the landlord would not transfer the lease unless I remained on as a co-signer.
If the new owner of the business defaults and gets evicted, would I resume paying the rent and become the sole tenant instead?
1 Answer from Attorneys
Re: Co-signer on business sold
You are correct that you would be liable if the new tenant defaults.
While the results are as you predict, your description is a bit off. What happens is that you are just as liable as the new tenant, meaning you are liable for rent just the same as the new tenant. As long as the new tenant pays, your obligations are also satisfied. But if the new tenant does not pay, the owner can go after both of you.
The owner could not evict the other tenant and keep you on the lease, but he could evict both of you for not paying. The effect is basically the same. I might suggest structuring the deal a bit differently - just have the new tenant be a sublessor. This does not alter your liability, but at least you are more clearly able to sue the tenant the same way a landlord might.
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