Termination of Commercial Lease in California for Failure to Repair

Full question:

I have paid rent for ten years for an office that leaks every winter and the ceiling has fallen in twice. It is now going to fall again and I have found another office. There is black mold in the office and I am horrified. I have been very ill, but did not know why. I cannot find help in Oakland, CA from Housing Inspector or anyone else! I have not paid rent for two months, but feel so violated and so ill. What are my rights?

• Category: Landlord Tenant
• Subcategory: Lease Violation
• Date: 04/07/2025
• State: California

Answer:

There are generally three ways to terminate a commecial lease early:

(1) termination due to the legal misconduct of the landlord;

(2) replacement in the premises by a new tenant, or

(3) by agreement between the landlord and tenant.

Most commercial leases contain contract terms as to the conditions you can terminate the lease early without penalty. If the early termination terms of the lease aren’t applicable, you may be liable for legal fees, sublease / assignment fees and payment of all or a portion of remaining rent.

If the landlord does not maintain the premises, this may constitute a breach of the landlord's duties. Local laws may provide for lease termination if there are undisclosed code violations or there are problems accessing the premises by the tenant. The landlord and tenant can always end their lease obligations by mutual agreement. It may also be possible to have the landlord agree to an assignment or sublease to a new tenant.

Mold cases often present difficult issues of proof with regard to causation and damages, due to the lack of standards for mold. Whether a landlord can be held liable for mold problems will depend partly on the nature of the problem and the disclosures made. Some of the issues that will be considered, among others, include the cause of the mold, whether proper measures were taken to inspect the property, if a problem was previously discovered, the adequacy of the steps take to cure the problem, the completeness and accuracy of the disclosures made, and the scope of the type of damages covered in any waiver.

For example, if Party A knows of a mold problem and fails to disclose the extent of the problem it is aware of or attempts to cover it up, a waiver may not be upheld. If the party knew of a mold problem, but failed to take proper measures to fix it , or failed to take proper measures to inspect the property for damage, a waiver may not be upheld. It will be a matter of subjective determination for the courts, based on all the facts and circumstances involved. Also, the insurance policy coverage will be a factor, as some policies exclude coverage for mold. It is recommended to discuss mold coverage with the insurer involved.