Vending machine leases survive new ownership
Q. I bought an apartment building a couple months ago. There were a number of vending machines in the common area. The seller told me I could get rid of them if I wanted to by calling the owner; otherwise, I could keep them and collect the money.
The machines are old and don't work sometimes, which leads to phone calls from my tenants. I've decided the machines aren't worth the hassle. I called the company and told them to come and get their machines.
They told me they have a lease in my building through 2017 and I owe them money for their share of the sales. I haven't signed anything so I don't understand how they can have a lease at my building. The guy on the phone was pretty rough so I just ended the call. Is it possible I'm stuck with these machines for the next three years?
A. Yes, it's possible. Leases survive changes in ownership.
When you purchased the building, you probably had tenants in the building with unexpired leases. These tenants had the right to remain at the property per the terms of their lease whether you wanted them there or not. The vending machines are no different, presuming the leases are valid.
Many of these types of leases have automatic extensions of the original lease terms unless notice of termination is given, at a specified number of days, prior to the expiration of the lease. Laundry room leases (leasing of washers and dryers) have similar provisions.
When you first learned the machines were not owned by the seller, you should have inquired as to the existence and terms of any leases. In addition, the seller should have disclosed the existence and terms of the lease(s) to you during your due diligence period. This disclosure may have been required under your contract with the seller.
I would suggest you contact an attorney familiar with these types of leases to discuss your options.
Q. I am selling my home to my daughter. We were getting ready to close when I learned that a mortgage I paid off 15 years ago was still on the title. Her mortgage company tells us we cannot close this deal until that mortgage is removed from the title.
The mortgage company I had went out of business many years ago. The title company is no help and the attorney I was using is a retired attorney who doesn't seem to know how to deal with this. Any ideas?
A. Sure. You need to determine what institution absorbed your former mortgage company. This can probably be determined by contacting the Illinois Department of Financial and Professional Regulation. Its phone number is (312) 793-3000 and its website is idfpr.com.
Once you make this determination, contact that institution and explain that you paid off your mortgage 15 years ago and you need a Release Deed. A Release Deed is issued by financial institutions upon the full satisfaction of loans that are secured by mortgages. The Release Deed is recorded, which effectively removes the mortgage lien.
Of course, given the amount of time that has lapsed and the fact that this wasn't the original mortgagee, they may have a difficult time establishing that the loan was paid in full. Any documentation you could provide will assist in resolving this.
• Send your questions to attorney Tom Resnick, 345 N. Quentin Road, Palatine, IL 60067, by email to tdr100@hotmail.com or call (847) 359-8983.