Can you sue a commercial landlord for grossly misrepresenting a space?

Asked over 1 year ago - Long Beach, CA

I was sold on a commercial space and after spending a lot of money on the space I found out none of the tenants are doing well. I have lost a lot of money. Is there anything I can do?

Attorney answers (3)

  1. Brad S Kane

    Pro

    Contributor Level 18

    4

    Lawyers agree

    Answered . In order to sue your landlord for misrepresentation there must be a specific factual misrepresentation that you reasonably relied upon in deciding to enter the lease. It is unclear how whether the other tenants are doing well relates to your decision to enter the lease.

  2. Paul Francis Easlick

    Contributor Level 13

    2

    Lawyers agree

    1

    Answered . Both Mr. Kane and Ms. Koslyn give you solid answers to your question, however I think your question probably shoud be, "How do I get out of this lease?" If you have solid facts supporting your claim of misrepresentation (refer to Mr. Kane and Ms. Koslyn), then you can break your lease. First, contact your landlord and inform him that you want out of your lease and why. If he demurs, then you can simply vacate and wait for the lawsuit, in which case you will have a good defense and a solid counter-claim. This method allows you to stop the bleeding. If there is no lawsuit forth-coming within a few months, then you can consider filing your own action for misrepresentation against your landlord if you choose.

    I am concerned, however, about your comment that none of the other tenants is doing well. Unless the landlord specifically misrepresented how they were doing, it was your responsibility to find out how the other tenants were doing if that was a major concern of yours when you signed the contract. I believe that the landlord has no affirmative duty to inform you how well his other tenants are doing. As Ms. Koslyn points out, your reliance on the landlord's misrepresntation must be reasonable, which means that as a busissman entereing into a commercial contract, you should do your own investigation.

    Finally, remember there almost certainly is an attorneys fees provision in your lease. This could be a huge weapon in a case like this, but remember also that it is a two-edged sword. Misrepresenta-tion is difficult and expensive to prove in court. Amost certainly there will be a jury trial in a case like this, requiring substantial invesigation, discovery, and expert witnesses. Get experienced legal advice before you even consider any of the options I or the other attorneys responding to your question give you. You are wading into deep water.

  3. Pamela Koslyn

    Contributor Level 20

    2

    Lawyers agree

    Answered . I agree with my colleague, this sounds like a long stretch. You provide no facts about what you was "grossly misrepresented," but in order to sue for damages or rescission based on fraud, you'd need to prove a 1) material 2) misrepresentation of fact 3) that the speaker knew was false 4) intending you rely on it which you 5) reasonably 6) rely on which 7) damaged you.

    So let's say your landlord said to you "You should rent this space. Every store in this mini-mall gets 50 customers an hour." Assuming that was false, you'd have to wonder how they knew this, and also assuming you were present at the premises a number of times to see for yourself how business was, you'd have a difficult time showing your reliance was reasonable.

    It may also be relevant was any RE agent said or heard re: the alleged misrepresentations, since these agents act for their principals.

    If there's more to your story, see a business litigator

    Avvo doesn't pay us for these responses, and I'm not your lawyer just because I answer this question or respond to... more

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