A landlord has filed a complaint with the Los Angeles County Superior Court accusing New York-based Knotel of not meeting obligations part of its profit sharing agreement.
The property owners, three limited liability companies conducting business as Olive Center, signed a nine-month lease with Knotel last July. The deal included Knotel paying $18,000 per month for the ground floor space. Knotel would then sublease the space out to tenants and provide Olive Center with 80% of the sublease income received on top of the monthly rent payment.
According to the lawsuit, the office provider decided to not renew their lease in late April, but never gave Olive Center the sublease income.
“Defendants failed to pay the plaintiff the 80 percent of the excess amount received, and said failure is and was a breach to the term of the lease,” reads the lawsuit.
According to Knotel, many of its tenants are unable to make payments due to the coronavirus. The complaint does not indicate any change in Knotel going back on its profit-sharing agreement due to the pandemic.