Checking Your Damage and Destruction Clause

Lease Agreement Resized

Hello to my ASTRA friends and clients! It seems so many of us are facing challenges from water and wind damage of hurricanes to smoke and fire damage of wildfires.

Because of times like this, I wanted to remind everyone that a landlord-standard lease term to be careful of is the “Damage or Destruction” clause. What does yours say?

Few business owners realize it, but that clause may give the Landlord unlimited time to rebuild damaged space before you can cancel the lease and re-open your business elsewhere. Statistics indicate if you are not open for business quickly your clients will find a new service-provider.

With poor lease-terms, you must return when the space is rebuilt – even if it takes a year or longer. (Even an easy fix could take a long time if the insurance adjusters and contractors are overloaded.)  You can’t commit to a new location and get back in business ASAP, because you may end up with rent liability on TWO locations!

This clause almost always needs fixing from the standard landlord language. You should talk to your attorney and check yours, and renegotiate it next time you renew your lease. I hope everyone makes it through these turbulent times safely!


Craig Melby, CCIM is founder of LeaseSmart a firm specializing in commercial real estate lease negotiation. For other tips, listen to their podcast or read the blog at www.leasesmart.com.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s