Horror Stories - Seller owns real estate

searcher profile

February 20, 2025

by a searcher from Northeastern University in Miami, FL, USA

Recently came across a colleague that went thru one of the worst stories I have ever heard. Seller kept land and real estate, they had a two year non-compete clause. Once it ended, seller opened a competitor on the same property, poached the entire workforce and decided not to renew lease to buyer.

Wondered if people had similar stories and how to best avoid these, should clause had been longer maybe it was okay?

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Reply by a professional
from The Johns Hopkins University in Basking Ridge, NJ 07920, USA
There are a number of other ways to limit these actions, but the most obvious: the non-compete term is way too short incident to the sale of the business - particularly given the leasing scenario. Unclear if there was a non-solicitation clause, but if not (or if too short like the n-c), that is an easy fix as well.
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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
^redacted‌ thank you for the share. I have seen a few cases of sellers acting dubious post-closing. Happy to discuss them.
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