Modifying a Lease Should landlord agree to modify a lease?

[Mirta]

Jurisdiction

California

Landlord told a tenant that the premises, tenant was interested in, had 1500 SF. Landlord came up with the rental based on 1500 SF, with the initial rental of $4 SF.

When tenant measured the premises, he realized that the premises had less than 1000 SF. He asked the landlord for an explanation. Landlord said that lease was not based on SF, but on other factors.

Tenant signed a lease and spent a year fixing the premises. He ran out of money.

Tenant would like to have the lease modified to reflect the fact that the premises have only 900 SF, so that during the first year he was paying $6.75 SF instead of $ 4 SF..His rental during the second year will be $ 7 SF, and since it is a long term lease, based on yearly increases in rental, it will be even higher.

If rental is not lowered, tenant cannot open for business.

Can this lease be modified?

 

[mightymoose]

The lease may be modified but does not have to be.
Any discrepancies with the lease should have been addressed before you signed.

 

[zddoodah]

When tenant measured the premises, he realized that the premises had less than 1000 SF.

Did this measurement take place before or after the tenant signed the lease? If I read your post chronologically, it sounds like the tenant signed the lease after discovering that the premises were smaller than originally stated. Does the lease say that the rent is "$6,000 per month based on 1,500 square feet at $4 per square foot" (or words to that effect) or doesn't just say that the rent is $6,000 per month?

Tenant would like to have the lease modified to reflect the fact that the premises have only 900 SF, so that during the first year he was paying $6.75 SF instead of $ 4 SF.

What would be the point of such a modification? If the monthly rent is $6,000, what difference does it make if it's based on 1,500 per square feet at $4 per square foot or based on 900 square feet at $6.67 per square foot?

Can this lease be modified?

Can it be modified? Sure, if the landlord agrees. But I doubt this is what you intended to ask.

 

[adjusterjack]

Tenant appears to be a rank amateur who has no business being in business.

 

[Mirta]

Before signing a lease, tenant asked landlord to explain why landlord said 1500 SF, when the premises had only 900 SF. Then the contact between the two was interrupted because of the Christmas holidays. When landlord returned, he said that the price was based on something else not the SF, and tenant signed the lease anyway.

Tenant hopes for a modification if he can prove (he saved email messages) that the landlord fooled him, and that since the premises have only 900 SF, the rent should be lowered.
$4 SF is the average asking price in the area.

He cannot visit landlord and ask him for a reduction in rent, just because tenant spent all the money fixing the place.

 

[Mirta]

Tenant appears to be a rank amateur who has no business being in business.

I agree. However, he is not the only one.
I wish to add that there are many tenants running good businesses, who have long, elaborate, leases, but do not know what's in their leases.

 

[Mirta]

The lease may be modified but does not have to be.
Any discrepancies with the lease should have been addressed before you signed.

True.
However, I just found out about it by an accident, and would like to insist on a modification, so that the tenant pays $4 SF for 900 SF, with a modest increase in rent in the future.

I am familiar with the law, yet I don't know how to make this happen.

 

[adjusterjack]

I am familiar with the law,

What law is that?

You were asked:

Does the lease say that the rent is "$6,000 per month based on 1,500 square feet at $4 per square foot" (or words to that effect) or doesn't just say that the rent is $6,000 per month?

When somebody asks you a question here, it's for a good reason. If you don't answer, we can't help you.

Whether or not you can make it happen depends on what the lease says. Quote it word for word.

 

[mightymoose]

I am familiar with the law, yet I don't know how to make this happen.

You won't make it happen. Only the landlord can do that.
You will have to convince the landlord that he is better off with less money.
It certainly doesn't hurt to ask the landlord to reduce the rent, but you don't have a legal tool to force the matter.
Finish the lease and either renegotiate or find a new place.

 

[Mirta]

What law is that?

You were asked:



When somebody asks you a question here, it's for a good reason. If you don't answer, we can't help you.

Whether or not you can make it happen depends on what the lease says. Quote it word for word.

Sorry I did not answer promptly.
However, I have received the answer from MightyMoose.

 

[Mirta]

You won't make it happen. Only the landlord can do that.
You will have to convince the landlord that he is better off with less money.
It certainly doesn't hurt to ask the landlord to reduce the rent, but you don't have a legal tool to force the matter.
Finish the lease and either renegotiate or find a new place.

Thank you.

 

[zddoodah]

Before signing a lease, tenant asked landlord to explain why landlord said 1500 SF, when the premises had only 900 SF.

So the tenant knew that it was 900 SF, and not 1,500 SF, before signing.

Tenant hopes for a modification if he can prove (he saved email messages) that the landlord fooled him, and that since the premises have only 900 SF, the rent should be lowered.

Since the tenant knew the true state of affairs before signing the lease, there is no basis for any modification. The tenant's recourse was not to sign the lease in the first place.

 

[Mirta]

So the tenant knew that it was 900 SF, and not 1,500 SF, before signing.



Since the tenant knew the true state of affairs before signing the lease, there is no basis for any modification. The tenant's recourse was not to sign the lease in the first place.

That is right.

 

[ElleMD]

Rent is rarely based on just square footage. Location, amenities, taxes, the landlord's mortgage, utilities, etc. can all be part of the rent.

 

[Mirta]

Rent is rarely based on just square footage. Location, amenities, taxes, the landlord's mortgage, utilities, etc. can all be part of the rent.

4$ SF is an average SF price in the area. The premises required extensive remodeling which took one year to accomplish. The lease is a NNN lease. Landlord does not have a mortgage.
Tenant ran out of money remodeling. Put all together, I find a plea for a modification as being very reasonable. However, law does not takes sides, if there is no legal basis for it.

 

[ElleMD]

You running out of money does not obligate your landlord to do anything. You signed a lease agreeing to pay a certain amount of money each month for some period of time. Trying to find a loophole is pointless. There isn't one. You knew before you signed how many square feet the place was. If the rate was too high based on the size, you shouldn't have signed the lease.

 

[Mirta]

You running out of money does not obligate your landlord to do anything. You signed a lease agreeing to pay a certain amount of money each month for some period of time. Trying to find a loophole is pointless. There isn't one. You knew before you signed how many square feet the place was. If the rate was too high based on the size, you shouldn't have signed the lease.

Hello. I agree with everything you say. I am a partner of landlord's partnership, trying to act as a Good Samaritan. But as you pointed out - "there is no loophole".

I can act on behalf the the partnership individually and modify the lease. However, that can result in a quarrel/quarrels among the partners, so I prefer not to do it.

 

[zddoodah]

Bottom line: nothing wrong with asking, but that's a matter of negotiation, not law.

 

[Mirta]

Bottom line: nothing wrong with asking, but that's a matter of negotiation, not law.

Alright. Let say, I modify a lease, lower the rental, sign it on behalf of the partnership, and it becomes valid. Tenant pays the new lower rental as per the Amendment and some partners are very unhappy. So there is a happy tenant on one side, and several very unhappy general partners, who cannot stop expressing their dissent over my action, on the other side.
There is nothing in the partnership agreement about this scenario.
What are the possible consequences besides partners' disapproval?

 

[army judge]

General rule of partnerships, of which I once was at Deloitte-Touche. One partner can legally bind the partnership.

Remember Andersen and Enron?

Legally you're free to contract on behalf of your partnership, unless your agreement inhibits or specifically prohibits you otherwise.

I agree, it can cause dissension among your partners.