Need info on Commercial Law Concerning Non-Compete and Leases
I started a little MMA gym inside of a Fitness gym. The gym(the gym I rent from) advertises itself as a fitness, kickboxing and martial arts gym and has been advertising this way for some time.
A boxing gym just moved into the unit next door.
The owner of the gym I am in did not sign a new lease yet this year, they were negotiating with the landlord still. Does he have any recourse at all? The old lease ended on 1/1/10 but they were negotiating a new lease.
Any help would be appreciated.
The first question I would ask is what I would almost always ask first in any contractual dispute: What does the contract say?
Does his original lease state that the mall/building is restricted from leasing space to a competitor? If so, how tightly does it define "competitor" (for example can two fast food places be there if one does burgers and the other mostly chicken, or would that be too similar...if you define competitor very narrowly you might even hear the argument that boxing and martial arts aren't direct competitors...even though that is ridiculous), and does it have any other exceptions to a blanket prohibition like requiring a certain square footage for the new business or anything like that? What does the termination language of the lease say, if anything, about extending the lease past the original termination date?
Sorry I can't be much more specific, but the starting point (at least in my approach) is to always start with the black and white terms of the contract first and then go from there. A lot will depend on what the language of the lease is, because if there are no restrictions on the landlord's ability to rent space to a competitor then you don't really have to get more in-depth in terms of extending the lease by mutual consent on an "at will" basis etc.
**Usual boring lawyer bullshit disclaimer** I don't practice in NY and don't specialize in real estate/commercial law but to the best of my knowledge these are the starting point you (and your gym) would want to consider first. You are also, of course, free to speak with a local lawyer who would have better access to all the relevant information and knows the specifics of your state's laws much better then I do.
Best of luck.