'As Is' Clause Doesn’t Excuse Failure to Provide Accurate Information about Property

June 6, 2019

What Happened: Tenants leased space in a Long Beach, Calif., shopping mall for use as a live music and entertainment venue. But when they opened their doors, they got lambasted with noise complaints from other tenants. Turn down the volume or change your business, the landlord demanded. The tenants were caught off guard, especially because the landlord had told them that there had been no noise complaints against the previous music club tenant.

What Happened: Tenants leased space in a Long Beach, Calif., shopping mall for use as a live music and entertainment venue. But when they opened their doors, they got lambasted with noise complaints from other tenants. Turn down the volume or change your business, the landlord demanded. The tenants were caught off guard, especially because the landlord had told them that there had been no noise complaints against the previous music club tenant. In fact, as the tenants soon learned, the space had been a longstanding magnet for noise complaints. The tenants sued the landlord for, among other things, negligence. The landlord denied any wrongdoing.

Decision: The federal court refused to dismiss the tenants’ negligence claim.

Reasoning: Negligence occurs when a defendant breaches a duty to use reasonable care and the plaintiff gets hurt as a result. The landlord claimed that it had no such duty in this case because the tenants leased the property “as is.” But the court didn’t buy it. Taking the property “as is” didn’t relieve the landlord of its duty to provide the tenants with accurate information or make misrepresentations to induce them into signing a lease. As a result, the tenants had a valid legal claim and deserved the chance to prove it in court.

  • Broken Drum Bar v. Site Ctrs. Corp.: 2019 U.S. Dist. LEXIS 86386 (May 2019)

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