Leases – Reasonable Wear and Tear Expected

Every commercial lease has a sentence that reads like this: “… at the end of the lease term, the Tenant must return the leased premises to the Landlord in the same condition as when the lease term began, normal wear and tear excepted.” Sounds pretty simple. But what about all of the improvements you made, like cabinets, lighting and partitions”? Those improvements weren’t there when you signed the lease. So, returning to the “same condition” may not include those improvements. Who pays to remove them and return your space to it’s original condition”? Most likely, it’s you.

Did you sign a personal guarantee? That guarantee likely reads something like this … “ owner guarantees the Tenant’s full performance of all the terms and conditions in this Lease…” Which means that you, personally guarantee that the space is returned to it’s original condition.

What to do:

Be certain that your lease says: “Tenant must return the leased premises in the same condition as found at the beginning of the lease term, EXCEPT: …………” Spell out what you’re not required to remove or repair.
It’s really that simple.

WAKE UP CALL – make certain that you limit the obligations in your personal guarantee or items like this will be enforced against you personally. More on that in future articles.

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