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Ely
Ely, Counselor at Law
Category: Real Estate Law
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Experience:  Qualified attorney in private practice including business, family, criminal, and real estate issues.
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Is real estate broker liable in case when hes aware that the

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Is real estate broker liable in case when he's aware that the property to be leased is going to be renovated, but he does nothing to warn the client that there needs to be an asbestos study done to make sure this renovation can be done? When the lease contract is signed, but later asbestos is found which makes it impossible to renovate and use the building as intended, is there any remedy for the client? Can the client get out of this lease?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Ely replied 1 year ago.
Hello friend. My name is XXXXX XXXXX welcome to JustAnswer. Please note: (1) this is general information only, not legal advice, and, (2) there may be a slight delay between your follow ups and my reply.

I am very sorry for your situation. Can you please tell me:

1) Why can the building not be renovated? Due to the asbestos?
2) Can the renovation still be done, or, not - it is simply not possible?
3) How is not having a renovation exactly prohibiting the building from being used?

This is not an answer, but an Information Request. I need this information to answer your question. Please reply, so I can answer your question. Thank you in advance.
Customer: replied 1 year ago.

The building is going to be used for a dance school. To be used for that purpose some of the interior walls would have to be removed, some ceiling work would also have to be done in several places, new walls built, etc.


The broker represents the building owner. They had the renovation plan before they started to work on the lease agreement, so the were aware that the building would have to be renovated and the extent of renovation.


The broker advised me that it is easiest to get the Certificate of Occupancy from the city first, start the lease, and then apply for the building permit to start renovation. The first thing the city required was the asbestos study. When I mentioned that to the owner he assured me verbally that there is no asbestos. However, he study has found it in all of the walls and parts of ceiling that have to be removed or worked on... The building can still be renovated, however the cost of renovation is about to double the cost originally budgeted... (Up to $25,000 extra for abatement of asbestos containing materials). I have a feeling the owner was aware of that but did not tell me, but I have no proof of that. So the question is, can the owner be forced to pay for it or at least for part of it, or can I get out of this lease, if the owner decides not to pay for it?


The reason I asked about broker's liability is to understand if he can be pressed to let me out of this lease because he did not disclose the asbestos information and implications... Thank you.

Expert:  Ely replied 1 year ago.
Thank you, Y.

On this website, I do not always get to give good news, and this is one of these times.

LEASE ITSELF
The lease itself likely cannot be broken. Unlike residential leases which allow the tenant many rights and warranties under the lease, commercial tenancies do not have these rights/warranties. The commercial tenancy is basically a contract - a very simply contract - between tenant and landlord. Unless the lease specifies directly, the landlord does not have to provide the property in a way specific to the tenant's business needs. Nothing is guaranteed.

As such, the lease may not be walked away from, in most cases, unless the landlord allows it.

BROKER
However, one can likely pursue the broker. To sue in a state court, one needs to have a "cause of action." There are numerous causes of action, such as "breach of contract," "negligence," "fraud," "unjust enrichment," etc., as well as causes of action rooted in statutory law. Every state has their own although they are very similar to each other in every state because they all stem from the same common law. A pleading in Court needs at least one cause of action, although it is not unusual to have more than one.

Here, this may be a cause for negligence. he elements of a negligence cause of action are a duty, a breach of that duty, and damages proximately caused by the breach of duty. Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990); El Chico Corp. v. Poole, 732 S.W.2d 306, 311 (Tex.1987). Here, one could argue that the broker KNEW of the requirements the tenant had, but, disregarded them and did not do as a regular broker would do in this situation to advise the tenant, and instead, pushed the tenant into the lease knowing full well it would cost the tenant a LOT more money than the tenant was telling the broker they were willing to put up.

This is a subjective matter, then decided on a case by case basis.

Please note: I aim to give you genuine information and not necessarily to tell you only what you wish to hear. Please, rate me on the quality of my information and do not punish me for my honesty. I understand that hearing things less than optimal is not easy, and I empathize.

I hope this helps and clarifies. Gentle Reminder: Use the reply button to keep chatting, or please rate and submit your rating when we are finished. You may always ask follow ups at no charge after rating. Kindly rate my answer as one of the top three faces and then submit, as this is how I get credit for my time with you. Rating my answer the bottom two faces does not give me credit and reflects poorly on me, even if my answer is correctt. I work very hard to formulate an informative and honest answer for you; please reciprocate my good faith.
Ely, Counselor at Law
Category: Real Estate Law
Satisfied Customers: 89142
Experience: Qualified attorney in private practice including business, family, criminal, and real estate issues.
Ely and 5 other Real Estate Law Specialists are ready to help you
Customer: replied 1 year ago.

I tried to follow up, but probably used the wrong place and afraid my card has been charged second time - I need to cancel that one...


 


My follow up question was - if the landlord did some renovation in property without permit from the city and disturbed asbestos in the process - I assume this is illegal - can that be used as a way to pressure him to pay at least part of the cost of abatement?

Expert:  Ely replied 1 year ago.
Hello Y,

Find customer support here - top right, and give them a call. They're super.

My follow up question was - if the landlord did some renovation in property without permit from the city and disturbed asbestos in the process - I assume this is illegal - can that be used as a way to pressure him to pay at least part of the cost of abatement?

The answer is yes. This gives one leverage the following way:

1) Threaten to call the landlord in for their actions and have them get into trouble unless they work with you; or

2) Threaten to go to Court and ask to be released from the lease because the landlord's actions AFTER the lease was signed rendered the property uninhabitable and costs you more money to fix. This may actually work...

However, different landlords respond in different ways. They may not take kindly to threats. Best to keep this civil and use a stick/carrot approach.
Ely, Counselor at Law
Category: Real Estate Law
Satisfied Customers: 89142
Experience: Qualified attorney in private practice including business, family, criminal, and real estate issues.
Ely and 5 other Real Estate Law Specialists are ready to help you

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Ely
Ely
Counselor at Law
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Qualified attorney in private practice including business, family, criminal, and real estate issues.