Misrepresentation of a lease

Question

Is misrepresentation grounds to terminate a lease, and what is the standard for determining misrepresentation? Colorado Law preferred if possible.

Answer 1

This is going to depend on whether what was misrepresented is an essential, major, or minor provision of the lease, or aspect of the deal. It will also depend on the wording of the lease or rental agreement.

Answer 2

Is misrepresentation grounds to terminate a lease

The details in your previous post certainly help narrow down some items on which you need to focus. Without some additional information the matter is inconclusive.

At the outset, the lease seems voidable by you on grounds of "mistake". See Restatement (Second) of Contracts at §§ 151, 153(b). The landlord not only "had reason to know of the mistake", but also "his fault caused the mistake". To void the lease, you will need to be able to persuade [in court] that the question of whether "it was a student housing area / college house" was decisive in entering the lease. In terms of the Restatement, the question is whether that is "a basic assumption" with "a material effect" on the formation of the contract. Similarly, see Id. at §§ 164, 167.

Although the information you have provided so far suggests that you are entitled to void the contract, another item you need to assess is whether entering the lease without ever seeing the unit is tantamount to you "bear[ing] the risk of mistake", since that would defeat your position. See Restatement at § 154(b). This point can only be ascertained from the terms of the lease, Zillow's terms & conditions, and likely other communications with the landlord.

Gregerson v. Weatherly, 417 P.2d 769, 772 (1966) ("The rule is general that the right to rescind a contract rests only with the party who is without default", citations omitted) is the converse of your situation. In Gregerson, the absence of fraudulent misrepresentation supports the court's refusal to rescind the contract, whereas your matter stems from the landlord's fraudulent misrepresentations.

The issues of "the dirt, broken tile floors missing drains in tub, and overall dingy dirty property" sound short of breach of warranty of habitability that entitles a tenant to terminate the lease pursuant to CO Revised Statute 38-12-507, although you are in a better position than us for pondering whether that is the case. Regardless, that is another example of landlord's misrepresentations that reasonably would induce a tenant to enter a lease.

Answer 3

Under CRS 38-12-507, there are circumstances pertaining to uninhabitability where a tenant could terminate the lease (10 to 30 days written notice of condition to landlord + 5 business days to remedy), where it is "in a condition that is materially dangerous or hazardous to the tenant's life, health, or safety" and is as described in CRS 38-12-505 (broken windows, sewer, water, heat, structure...). In that case, though, it has nothing to do with a landlord's representation. And note that you can't just walk away if the place is deemed in breach of the warranty of habitability.

The terms of the lease are set in that piece of paper that you signed. It would depend on what things the piece of paper says. If, for example, the lease purports that here are two bedrooms in the unit and in fact there is only one, that would be a landlord's breach of contractual obligation. That doesn't mean that you can terminate the lease, but if you sue him for breach, a possible remedy is terminating the least.

Verbal statements are not lease terms, especially statements about things that you aren't renting, thus "It's a nice quiet neighborhood" isn't a lease term and you can't sue in case it is a lousy, noisy neighborhood. It is expected that you (or your agent) would make your own judgment as to the neighborhood, and you have agreed to rent the units that was on offer.