The best way to do that would be to select the corner edge (before you cut it off) and use the bevel tool on it. You just need to increase the subdivisions in the tool's settings and then drag to bevel, or set a specific distance in the tool settings and click apply.
I was able to do it by deleting the walls and beveling the point at the corner of the floor to create the circular corner and then re-extrude the walls.
But when i tried to bevel the corner edge where the two walls meet, it didn't work.
Try the optimize command under the Mesh>Commands menu. It will well all points within a specified tolerance. I think default is .01 units but you can change that by clicking on the little cog wheel to the right of the command name.