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Landlord-tenant disagreements: Construction firm to be evicted

A group of property owners has requested the U.S. Bankruptcy Court if it can issue an eviction notice to a bankrupt construction company that is inhabiting an investment property in Grand Rapids, Michigan. The petition was filed on July 16. Allegedly, the construction company has failed to pay over $45,000 in rent and has accrued late fees of about $2,300.

The real estate property at issue is a uniquely shaped cantilevered building. The main office floors of the edifice are suspended in air above its service buildings below. The now bankrupt construction firm has inhabited the premises -- which are valued at approximately $5.5 million -- since 2008.

The construction company ceased operations on July 9 and laid off 280 employees, who were working at the company's offices in West Michigan and two other states. Since then, the firm has been embroiled in various lawsuits from bank creditors and ex-employees. Also, rival construction companies have been scrambling to scoop up the construction firm's laid off employees.

When the owner of a Michigan investment property notices that a tenant has failed to meet the contractual payment obligations of the lease, an eviction notice may not always be the best solution if it appears likely that the company or tenant will soon gain financing to pay. However, if a company is bankrupt and closes its doors, it may be appropriate to evict the tenant in order to free up the location for a new company to inhabit the space. It may also be appropriate to file a claim against the defunct firm in bankruptcy court to try and recoup as much back rent as possible.

Source: mlive.com, "Lamar Construction Co.'s landlord seeks permission to evict its bankrupt tenant" Jim Harger, Jul. 17, 2014

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