Home Q&A Forum I have found gas lines in my newly leased restaurant building that never had tge proper permits. The last restaurant owner went into bankruptcy. How could this happen? I am now being told that I have to pay $ 350,000 to make this right before i can open.0

Real Estate

Commercial Building Lease

Tennessee

Asked on Sep 15, 2026

I have found gas lines in my newly leased restaurant building that never had tge proper permits. The last restaurant owner went into bankruptcy. How could this happen? I am now being told that I have to pay $ 350,000 to make this right before i can open.0

There is also a large pizza oven that the property owner will not remove . Isn't it owned by creditors?

Answers from 1 Lawyer

Answer

Real Estate

Tennessee

Answered 16 days ago

Fema B.

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August 28, 2026

This situation should be reviewed before you agree to pay the $350,000. The first documents I would examine are your commercial lease, any landlord representations regarding code compliance or permitted use of the premises as a restaurant, the certificate of occupancy and permit history, and the notices or reports identifying the gas-line violations. Tennessee currently applies the International Fuel Gas Code to regulated construction, but the governmental authority responsible for permitting and inspection can depend on where the property is located. Whether the cost ultimately falls on you or the property owner will depend heavily on the lease. Commercial leases frequently allocate responsibility for code compliance, repairs, pre-existing conditions, tenant improvements, and governmental requirements differently. If the gas work predated your tenancy and the premises were represented as suitable for restaurant use, there may be substantial issues concerning the landlord's obligations, representations, and potentially your remedies under the lease. I would not assume that simply because the municipality is requiring corrective work before opening, you are contractually responsible for the entire cost. The pizza oven is a separate ownership issue. The fact that the prior restaurant operator filed bankruptcy does not automatically mean the oven belongs to its creditors. You would need to determine whether the oven was owned by the former tenant, leased, subject to a perfected security interest, abandoned or transferred through the bankruptcy, or legally became a fixture of the real property. Tennessee law recognizes separate creditor and priority rules for goods and fixtures, including circumstances in which a secured creditor may have rights to remove fixtures. Before removing, using, or disposing of the oven, I would review the prior tenant's bankruptcy docket and asset schedules, run a UCC lien search, and determine whether the landlord received title to or abandoned-property rights in the equipment. I would also obtain the complete permitting history for the building and have counsel review the lease before accepting responsibility for a remediation bill of this magnitude.

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