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We leased a commercial space and are regretting our

We leased a commercial...

We leased a commercial space and are regretting our decision. We have found out that the building is no where close to being up to code for the county. We also know the landlord has never received an Occupancy Permit to have a business out of that space. Do we have anyway of recouping our rent and security deposit to get out of our lease?

Lawyer's Assistant: Because laws vary from place to place, can you tell me what state the property is in?

Also, the work that needs to be done will cost 10-20,000 which the landlord knew prior to us occupying we didn't have extra money for improvements. We were just going to paint and put new floors in.

Lawyer's Assistant: Has anything been filed or reported?

Michigan

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

What do you mean by filed, with a court, no. We don't know what steps to take

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Customer reply replied 1 month ago
To add to the story. We negotiated a shorter term lease on the basis we would pay all money upfront.Lease was signed 1/13/18 and it was to start Feb 1st. After signing lease we were notified that we could not get our Land Use permit due to the landlord not completing a parking lot. It took until this week to have the landlord and village to come to an agreement on parking lot and we now have a temporary Land Use permit based on conditions of him completing the parking lot.So right now we have been delayed opening, lost revenue and potential loss of our rent that we paid.Also to note we are opening up a small group training studio.
Answered in 18 minutes by:
3/9/2018
Attorney Wendy
Category: Legal
Satisfied Customers: 531
Experience: Member at Keefer & Keefer LLC
Verified

Hello. My name is ***** ***** I have been an attorney for about 20 years. This is certainly a frustrating situation. The key to what your options are lies in the terms of your lease. First, if the purpose for the lease (name of business and type of business) is included, which is often is in commercial leases, but the building is not up to code or able to be occupied for that purpose you should be able to terminate the lease and recoup your funds. If that is not specifically spelled out you will want to review what exactly is in the lease - not only as to intended use but also as to improvements. At this point, I would contact the landlord in writing - assuming the lease supports your position - and let the landlord know that you do not view the premises as fit for the intended purpose and that as delivered it does not comport with the lease and you intend to terminate and expect return of all rents and security deposits. Protections for commercial tenants tend to be less than for residential tenants, but if you are unable to occupy the premises for the purposes for which they were rented, you should have an option to terminate. Also, if you used a commercial realtor who knew what you intended to do with the space and yet participated in a lease of a space that could not serve as your business location that is an issue as well. If there is no Occupancy Permit, that should also provide grounds for termination as the building is not habitable. In addition, if the building is not up to current building codes that would allow for occupancy, that is further grounds. There is likely some ability and time period on the part of the landlord to cure these deficiencies (ie. the law likely provides, after you give written notice to the landlord of these issues, a time period in which the landlord can make things right and bind you to the lease). The right to cure is to avoid a situation where someone terminates a lease solely because they wish they hadn't entered into it. Though it appears you do have some regrets; it also appears the building cannot be legally used for your business without significant upgrades or renovations that if not your responsibility in the lease are likely grounds for termination.

If you have additional questions or want to send me the lease to review, please reply to this email. If I answered your question and provided excellent service, I would greatly appreciate a 5 star rating at this point.

​Please note: This is for informational and educational purposes only and is not legal advice. No course of action has been proposed and no attorney-client relationship or privilege has been formed as a result of this conversation.

Attorney Wendy
Category: Legal
Satisfied Customers: 531
Experience: Member at Keefer & Keefer LLC
Verified
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Customer reply replied 1 month ago
I have attached our lease. This is where I think we may have an issue and I cannot believe my husband and I completely missed this part. It states the East wall would be our responsibilty. This is one of the areas that needs to be brought up to code.Here are the other issues
1)Electrical Box needs to be split and moved to outside of building. Currently the electrical box is in our area and there are three units in the building.
2) Heater needs to be replaced to meet code. The one he put in is not good for our purposes and venting would need to be put it to the main space as well as bathroom.
3) A second bathroom needs to be installed
4) Possible ADA needs to addressed, we are unsure if it meets the requirement
5) Electrical needs to be brought up to code
6) Exterior building, specifically East wall needs improvement
7) We have an interior space, so we need to put up a fire wall in between unitsThese may need to be addressed with an architect to really get a better idea of what needs to be done. However the landlord definitely made us feel like everything would be fine to occupy this space and that only painting and flooring would be necessary.
Customer reply replied 1 month ago
I am having problems uploading my files for my lease agreement
Customer reply replied 1 month ago
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pg 14 this is the last page
Customer reply replied 1 month ago
I guess we just don't know what our options are at this point. Do we even have a case to fight against him?

I have reviewed your lease. Unfortunately, Section/Paragraph 32 read with Section/Paragraph 8 does not make it clear what purpose you were intending to lease the premises for and also seems to indicate that if governmental bodies require any changes you may be obligated to undertake those at your expense. That being said, there is likely still an argument that the landlord provided premises that were not able to be legally occupied. After review of the lease, your first approach may be to contact both any building inspector/permitting office and your landlord to determine if in fact any occupancy permit or certificate of occupancy was ever issued. If you used a realtor to find this space, I would also contact that individual. Unfortunately,there may be some statutes/laws that provide you minimal extra protection, the lease does not really obligate the landlord to do much (which, if it provides some comfort, is not uncommon with commercial leases). If you truly do not think you can operate your business here you have some options: (1) try to negotiate a termination with the landlord (e.g., surrender your deposit and get out); (2) try to sublease if you determine it can be occupied but is just not the right fit for you; or (3) pursue claims for misrepresentation if you believe either the landlord or any realtor misled you as to the current condition of the premises. I would be sure you have kept any documentation about your search for and ultimate leasing of this property. I am sorry I don't have better news for you or a more certain solution, but hopefully you can find a suitable solution.

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Customer reply replied 1 month ago
Thank you for your help.

You are very welcome and I hope you are able to find a suitable resolution.

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Customer reply replied 1 month ago
Another question. Does the State of Michigan require a landlord to have his own Certificate of Occupancy prior to leasing to another person/business?

Not necessarily. A landlord could enter into a lease for premises that are not even fully constructed yet. But you would expect that to be spelled out in the lease itself with some provisions for expected move in dates and the like.

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