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It’s not just business bottom line. If he is leasing an office it is almost certainly a violation of the lease to have someone sleeping there. The fact that the business owner knows is likely grounds to terminate the lease outright. Unlikely to happen in 2020 but the point remains.

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Some people value giving someone a second chance more than they value honoring their lease agreement.

You could say that OP has violated their lease agreement, but OP might say that our society has failed this employee. They're both issues that should be fixed. I don't think it's reasonable to say that OP is nuts for having a different opinion than you on which issue should be fixed first.

Of all the ways to help this individual, letting “Jake” sleep at the office is absolutely, unequivocally, not an option.

OP is not just risking the lease. He or she is risking the business and the lives and livelihoods of all the employees.

Sure, and when the entire business has the lease terminated because they failed to deal with this, they can all claim that society failed them.

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