Should I sue a business from breaking the lease contract?

[towamp]

What is the name of your state (only U.S. law)? California

I rented out a property for a small business by signing a 5 year contract with them (with personal liability). The contract stated that contingency will automatically be removed 120 days after signing the contract. On the 120th day, the business requested a contingency extension claiming it needed more time to finish performing due diligence, but I refused.

On the 135th day, a business representative stopped by my place giving me the property keys and saying the business is terminating the lease. I was surprised and threatened to sue them. Here is some additional information about the case:

Good points that I can use in court against them:
the binding contract both parties signed
I started mitigating my losses as soon as the business gave me back the property keys: I've put the property for rent but I'm afraid it's going to take some time to rent it out


Bad points that might be used against me:
while performing their due diligence, they discovered a problem with the property's building that was falsely advertised by me (disclaimer: the advertisement was done to the best of my knowledge) To try and fix it, they applied for a permit but the city didn't allow the changes which means the property can't be used to conduct their business
I didn't pay the real estate agent commission after the agreed on contingency-removal date. I admit it's a mistake but I needed the money when I knew the business might default on their lease


My Question
Should I consider suing them or suing is not worth the effort? What do landlords with similar issues usually do in my case?

Thank you!

 

[LdiJ]

What is the name of your state (only U.S. law)? California

I rented out a property for a small business by signing a 5 year contract with them (with personal liability). The contract stated that contingency will automatically be removed 120 days after signing the contract. On the 120th day, the business requested a contingency extension claiming it needed more time to finish performing due diligence, but I refused.

On the 135th day, a business representative stopped by my place giving me the property keys and saying the business is terminating the lease. I was surprised and threatened to sue them. Here is some additional information about the case:

Good points that I can use in court against them:
the binding contract both parties signed
I started mitigating my losses as soon as the business gave me back the property keys: I've put the property for rent but I'm afraid it's going to take some time to rent it out


Bad points that might be used against me:
while performing their due diligence, they discovered a problem with the property's building that was falsely advertised by me (disclaimer: the advertisement was done to the best of my knowledge) To try and fix it, they applied for a permit but the city didn't allow the changes which means the property can't be used to conduct their business
I didn't pay the real estate agent commission after the agreed on contingency-removal date. I admit it's a mistake but I needed the money when I knew the business might default on their lease


My Question
Should I consider suing them or suing is not worth the effort? What do landlords with similar issues usually do in my case?

Thank you!

The bolded is a serious big deal...particularly in light of your refusal to extend the contingency.

 

[towamp]

The bolded is a serious big deal...particularly in light of your refusal to extend the contingency.

So you're suggesting I don't waste my time and money on a case that might be difficult to win? And thank you for your prompt response.

 

[LdiJ]

So you're suggesting I don't waste my time and money on a case that might be difficult to win? And thank you for your prompt response.

Yes, that is exactly what I am suggesting. In fact, I will take it a step further. You admit that you falsely advertised the property (even if you didn't do it on purpose). If you sue them, I suspect that they will countersue you for all of their out of pocket expenses related to the property, to date, plus their attorney fees. Therefore, not only might you lose the case, but you might lose it in a very expensive way.

Be much more careful in your advertising in the future. It may have been a big mistake to refuse to extend the contingency if you knew when you refused that the building currently could not house their business. They might have found a work around for that had they had more contingency time.

 

[towamp]

Yes, that is exactly what I am suggesting. In fact, I will take it a step further. You admit that you falsely advertised the property (even if you didn't do it on purpose). If you sue them, I suspect that they will countersue you for all of their out of pocket expenses related to the property, to date, plus their attorney fees. Therefore, not only might you lose the case, but you might lose it in a very expensive way.

Be much more careful in your advertising in the future. It may have been a big mistake to refuse to extend the contingency if you knew when you refused that the building currently could not house their business. They might have found a work around for that had they had more contingency time.

My understanding is that the state of CA place the burden of due diligence onto the lessee? Shouldn’t he have done his due diligence within the required time before the lease went hard?