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What is the legal definition of good working order?

Fremont, CA |

We leased a commercial property that was a restaurant. We are using it for restaurant and are remodeling it to reopen in a few months. During remodeling, we discovered the old grease trap was deemed too small by the city. A larger grease trap must be installed or cannot be used. Our lease contract states the landlord must make sure/provide the grease trap in good working order. Does good working order mean that it functions regardless if the function is useless because it doesn't meet code requirements? Or does good working order mean it has to be to code so that it can be used?

Attorney Answers 3

Posted

I doubt there is a legal definition in this context for this term. I recommend working it out with your LL so that you can have a long / profitable history together...

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Posted

I agree with Attorney Kaufman that there is no specific legal definition of “good working order”, though it may be defined in your lease. The general definition of “good working order” is that the machine or system in question functions according to its nature and purpose. While that does not specifically mention regulatory compliance, it does not rule it out either. Arguments can be made by both landlord and tenant for and against the idea that “good working order” requires the apparatus to be not only functioning but to also be compliant with all applicable regulations and codes. To determine the meaning in your lease, without a specific definition, you may have to determine the intent of the parties. One possibility would be to see if there is a separate provision in your lease that requires the premises or any equipment to be code compliant. If there is such a provision, then it can logically be inferred that “good working order” does not include compliance because there is a separate provision for compliance. Another possibility is to go back through the lease negotiations to see if there were ever discussions about compliance with regulations/codes (maybe an earlier version of the lease or the LOI had different wording that referred to compliance with applicable municipal codes). If you come up empty, then you’ll have to work it out with the Landlord. As Attorney Kaufman pointed out, you will have a long-term relationship with the Landlord, so it’s important to start off on the right foot. You should mention the grease trap to the Landlord and ask if they will split the cost of the installation or increase your tenant improvement allowance to include the cost of this improvement.

I hope this helps and I wish you good luck.

This response does not create an attorney-client relationship and is not intended to provide legal advice for your specific situation

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Posted

I agree with attorneys Scott Kaufman and Melissa Lenhard. In addition to the advice of Mr. Kaufman and Ms. Lenhard, if you cannot reach an agreement with the landlord you should speak with a Contract Attorney concerning the possibility of a rescission of contract based upon mutual mistake of fact.

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