In February 2005, Dandey Corporation and Nick's Hideaway, Inc., entered into a 10-year lease of property for use as a restaurant. The property had been operated as a restaurant for decades and had a certificate of occupancy as an existing nonconforming use. Immediately after signing the lease, Nick's began extensive renovations of the premises, without first seeking a permit for such work. Nick's later submitted an application for a permit. During the town's review of that application, it was discovered that, approximately 20 years earlier, Dandey had expanded the original building, in violation of a zoning rule that a nonconforming use may not be enlarged, and that the extensions did not have a certificate of occupancy. Upon discovering that the premises could not be used as intended, Nick's stopped paying rent. In January 2007, Dandey sued Nick's for nonpayment of rent. Nick's seeks rescission of the lease. Will it win?
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