Don't Bet the Business

I have litigated commercial leases since before PC’s were a common lawyer’s tool. During that period, one issue seems to always find its way onto my docket – how to interpret and apply the typical repair and maintenance clause. 

Most commercial leases, at least those that give the tenant exclusive possession of the leased premises, burden the tenant with repair and maintenance obligations during the lease-term. Most of those leases tend to characterize the tenant’s obligation as one to “keep the premises in repair and good condition, normal wear and tear excepted.”  An innocuous little phrase to be sure, and one that seems to serve its intended purpose fairly well since it, and versions similar to it, are so often found in the boiler-plate. So if the obligation is so clear and harmless, why is it so frequently a matter of lengthy and costly disputes?

My personal view is that landlord’s and tenant’s alike tend to view this type of clause as one  expressing a mutual interest. The assumption being that, throughout the lease-term, the tenant’s interests are best served by maintaining its work space, office, warehouse, or what have you. This interest, when carried out, also tends to benefit the landlord for obvious reasons. Because of this “you scratch my back, and I’ll scratch yours” attitude about repairs and maintenance, not much thought is put into this otherwise common obligation. 

This, however, is the transactional view at the time of closing, not the litigator’s view when a dispute arises. When a dispute arises the 13 innocuous words in the common repair and maintenance clause have the capacity to stir trouble you can hardly believe. 

These disputes do not necessarily arise only at the conclusion of the lease, when a landlord is taking stock of what is being left as the tenant is moving out. Those 13 words can, and do, create ongoing obligations throughout the lease-term and, trust me when I say this, landlords and tenants frequently are at odds as to what repair and maintenance actually means, what it includes and doesn’t, how much it should costs, how frequently it must be addressed and – perhaps this is the biggest question mark – what does normal wear and tear mean and what, if anything, does it excuse during the term.

There is not time and space to address each of these issues in a mere blog post.  Suffice it to say, however, that if just a little bit of time and attention was paid explaining the scope of a tenant’s repair/maintenance obligation, in clear and simple terms, I might not have spent a career litigating those claims and my clients might have saved considerable time, untold aggravations, and so much money that I long ago lost count. 

This issue is a close cousin to the problem of lease ambiguity I have commented on in the past. And I’m not suggesting that to “fix” the problem it is necessary to “lawyer up” every section of your lease. To the contrary, I am suggesting that adding some plain and simple language to your repair and maintenance clause might avoid “lawyering up” at all.