The Damage and Destruction provision in a lease specifies what will happen if the leased premises or the building housing the leased premises is damaged or destroyed. It typically provides that the landlord may elect, in its sole discretion, to continue the lease or to terminate it. In the case of continuation, it usually provides for an abatement of rent (reduction) in the same proportion that tenant's use of the leased premises is impaired. The tenant must make sure that the abatement of rent language is fair. Some leases base it on the amount of square footage of the leased premises that is damaged or destroyed. This is unfair since sometimes the entire leased premises may not be useable even when the damage is to a small area. For example, if the entry is blocked, it does not matter if the rest of the premises is not damaged; no one can enter. In this case it would be landlord's responsibility to repair damage, make sure the tenant retains the right to complete improvements following the landlord's repair before rent obligation resumes.

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Nothing found herein should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law. You should not rely solely on this information. We encourage our clients to work with a lawyer experienced in commercial and/or residential real estate matters as they can be complicated and confusing.