ZK Oakland Properties v. Golden Stream Properties CA1/4

BACKGROUND

I. ZK Leases Premises to GSP

ZK leased commercial property (the premises) to GSP for a term of ten years. The lease required monthly rent payments and specified late payment fees. The lease also required any modifications be “only in writing, signed by the Parties in interest at the time of the modification.” Both parties understood GSP intended to use the premises for licensed cannabis cultivation. The lease required GSP to operate “in strict compliance with state laws” as well as “federal and state tax requirements” and applicable “zoning laws, city ordinances, [and] consumer product laws.” The lease also specified GSP would take possession of the premises in its “ ‘as is, where is, and with all faults’ condition.” Additionally, because “[t]he Parties acknowledge[d] that the Premises [was] not in compliance” with the legal requirements for cannabis cultivation, the lease expressly made GSP responsible for the cost of all necessary improvements. The lease also forbade GSP from subletting or assigning the premises “without [ZK’s] prior written consent,” which in turn ZK would not “unreasonably” withhold, condition, or delay. The lease further stated that any…