Running a business takes time and money, and many business owners attempt to save by using boilerplate legal documents, such as off-the-shelf commercial leases. This approach can cause problems for both tenants and commercial landlords, as so-called “standard” leases typically use general language that doesn’t address the particular needs and concerns of the parties.
“Wear and tear” clauses are a good example of how boilerplate language can lead to disputes down the road.
Standard Wear and Tear Clauses
Most commercial lease agreements include a clause whereby the tenant promises at termination of the lease to return the premises to the landlord in a condition similar to that at the time the tenant took possession, excepting “ordinary wear and tear.”
At first, this seems like a straightforward concept. Upon closer inspection, however, this language says nothing about what constitutes “ordinary wear and tear.” For example, it’s unreasonable to think that a tenant who leases a retail space to sell clothing should be able to return the space with oil stains all over the floor. This is not ordinary wear and tear for a space that is likely carpeted and used for selling soft goods.
In another example, however, oil stains on the floor seem reasonable if the tenant is a mechanic who performed automotive maintenance and repairs in an industrial space with concrete floors. In these examples, the differences are critical because they dictate what qualifies as “ordinary wear and tear.”
Building a Better Commercial Lease
Whether you’re a landlord or a tenant, it’s important to have a carefully drafted commercial lease that clearly specifies the obligations and liabilities of both sides. Clearly defined terms and provisions can prevent disputes and save all parties money and time down the road.
When drafting your commercial lease – and specifically a wear and tear provision – consider the following:
- The lease should state the reasonable life expectancy of any items that require maintenance and replacement, as well as which party is responsible for maintenance and replacement.
- Specify which items require repair and replacement at the termination of the lease. For example, does the tenant have an obligation to clean the carpet, or does the lease require the tenant to install new carpet at the end of the lease?
- Each party should have the opportunity to inspect the premises and record its condition. This way, both parties start off on the same page, both literally and figuratively.
Roseville, California Business Lawyers
The business lawyers at Yee Law Group Inc., PC assist businesses throughout the greater Sacramento, California area. Call today at (916) 599-7297 to speak to an experienced business attorney about your goals.
This website has been prepared by Yee Law Group Inc., PC for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.