Twitter Sued For Failing To Pay Office Rent: Twitter is being sued for breach of contract by a commercial landlord after it is claimed that the business did not pay the rent for one of its San Francisco locations.
Instead of Twitter’s primary offices on Market Street, the 650 California Street office space is the subject of the case. However, it comes after media reports last month claimed that Twitter’s new owner, Elon Musk, had ceased paying rent on Twitter’s offices around the world, including its headquarters, and had instructed staff members not to pay business vendors in an apparent effort to reduce costs. Musk paid $44 billion for Twitter, which included a sizable amount of debt financing.
Twitter allegedly failed to pay $136,260 in rent for its office at 650 California Street, according to a copy of the complaint submitted last week in California Superior Court in San Francisco.
On December 16, the landlord responded with a notice, giving Twitter an additional five working days to make the payment or face being in default.
The landlord, Columbia REIT – 650 California, LLC, has filed a lawsuit, requesting that the court order Twitter to pay the back rent, interest, and the landlord’s legal costs.
A representative with Columbia Property Trust, better known as Columbia REIT, declined to comment. A request for comment was not immediately answered by Twitter, whose communications team was reduced by Musk after he acquired the firm.
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According to its website, Columbia manages more than a dozen office buildings in Boston, New York, San Francisco, and Washington, DC.
According to Daniel Bornstein, a San Francisco real estate lawyer who defends landlords in tenant-landlord issues, if Musk chooses not to pay some of Twitter’s debts, this complaint may be just the first of many to be dropped.
However, he claimed that because Musk is one of the wealthiest individuals in the world, landlords of office space will be reluctant to exert too much pressure on him.
Thanks to Musk’s huge pockets, Twitter is a profitable tenant—at least when it pays or is compelled to pay. Although it would be worse for the landlords than having to go to court to collect the money, overly aggressive landlords run the risk of causing Musk to completely vacate the rented spaces, which would cause an expensive extension of emptiness for the buildings.
Bornstein claimed that while Columbia could have requested Twitter’s eviction in the case filed last week, it decided against doing so, indicating that the landlord still views Twitter as a tenant.
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“Elon may be signaling that he is truly interested in renegotiating the terms of the lease agreement by failing to pay the rent,” said Bornstein. (According to a New York Times piece from last month, musk is reportedly attempting to renegotiate or opt out of some of its office renting arrangements.)
According to University of Richmond law professor Carl Tobias, the action is a logical result of Musk’s failure to make payment.
Tobias added that when a tenant has a lease and fails to make the requisite rent payments under a valid contract with the landlord, “the litigation is a regular and expected action to occur.”
“These disagreements frequently resolve amicably without going to court to minimize litigation expenses and negative publicity.”
He continued by saying that after exhausting all other avenues to collect money, it would be expected for a landlord to ask for attorneys’ costs in addition to the overdue rent.
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