Recently, we have had two instances in which clients signed leases and were obligated to obtain an Occupancy Permit. In both cases, the prospective tenants were unable to obtain an Occupancy Permit because the use was not permitted. The landlord did not inform, or was unaware, that the use was not permitted in the zoning.
Most leases state that the tenant has the responsibility to ascertain if the use is permissible. Generally, this is a term that should be negotiated. Unfortunately, there are those prospective tenants who do not have their leases reviewed prior to signing and agreeing that it is their responsibility.
We have been able to assist clients when we review leases by insisting that the landlord represent that the use is permitted, and/or adding in language that the lease is contingent upon the use being permitted and an occupancy permit can be obtained, or else the tenant is able to terminate the lease. If the landlord refuses to do so, then we send our clients to the appropriate zoning authority for a preapproval before execution of the lease.
Needless to say, having an attorney review a lease prior to signing is a necessity and should not be overlooked. We are available if you need us. Contact Michael Faerber or any of our attorneys in our real estate legal team at McMillan Metro, P.C. if you have any question about the foregoing or if we can be of help to you with your real estate or other legal matters for you or your business.