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WiseOwl58, Attorney
Category: Business Law
Satisfied Customers: 3721
Experience:  Senior Associate at White & Case LLP
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We entered into a commercial lease for a space that was advertised

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We entered into a commercial lease for a space that was advertised as 810 square feet. We have a unique five year government contract to test candidates on their knowledge on public swimming pool operations, and have obtain the contract to offer testing large groups of candidates at once, and applied for and obtained the business license to do this at the location based on the understanding that we had 810 square feet. We have recently found that we only have 625 square feet, which most likely will affect the number of candidates we can handle, and may cause us to be in violation of our business license and the fire codes among other things.

Our lease was based upon a price per foot amount, and is a year-to-year lease, with the first year earlier passed, and we are now into our 4th month of our second year. Are we entitled to void the lease and ask for a refund for the difference we have previously paid in regard to the advertised size of 810 square feet, since the actual size is 625 square feet?

Again, we are concerned that we may be violating zoning codes, fire codes regarding occupancy numbers, and our agreement with the government, among the issues for we approached for the approval of the sight with the understanding we had the full 810 square feet.
If the landlord knew that you required 810 feet and that you were only getting 625 square feet, and the landlord knew that it was not suitable for the business purpose that you rented it, then you would have the right to void the lease.

If the landlord made an honest mistake in representing the size of the pool, then you can sue the landlord for the damages you suffered because of the smaller size, but it would not be grounds to void the lease. In other words, the lease would still be in effect, but you would have the right to sue the landlord for the damages you suffered, which would include a reduction in the number of candidates you can handle and the reduced profits that you earn by taking fewer candidates.

So there is a factual question here about what the landlord knew at the time the landlord entered into the lease.

You should decide which is the desired outcome for you---would you rather terminate the lease and get out of it completely, or is it more beneficial to stay in the location but make less profit and claim the lost profit against the landlord. Then once you have done that, you should send the landlord a notice in writing either terminating the lease for misrepresentation, or demanding payment for the lost profit you have sustained (but in that case you would still be obligated to continue to pay the rent under the lease.)

Good luck to you. I wish you all the best.
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