LEASE AGREEMENT REFERENCE GUIDE 750: STRATEGIES TO LIMIT LIABILITY $24.95
STRATEGIES TO LIMIT LIABILITY
This LARG looks at devices which limit the landlord's liability under the lease. The first section surveys some of the most common pro-landlord limitations with sample clauses and comment. The second section briefly looks at potential problems with the landlord's default clause from the tenant's perspective. Next is a pro-tenant check list concerning pro-landlord limitations of liability. Finally, the Lease Clause Critique analyzes several clauses which release the landlord from liability after a sale of the property.
Lease Clause Critique: A Sampler of Pro-Landlord Liability Limitations
Landlords have traditionally tried to limit their exposure to lawsuits and damages by including limitation of liability provisions in their commercial leases. The clauses contained in this article are representative of such provisions, which pertain generally to liability arising while the landlord still owns or holds title to the leased real estate. Although the landlord's objective is similar, the clauses which follow differ from limitations of liability or releases of liability for events occurring after the sale of the real estate by the landlord (see the Lease Clause Critique for examples of such clauses).
Clauses limiting the landlord's liability can be used in the lease documentation for virtually any type of property: office, retail or industrial. Like most matters, though, precisely how much exculpatory language the landlord can include in the lease is a function of the relative leverage of the parties. Of course, the current high vacancy rates in many markets drastically reduce the probability that the tenant will ultimately have to swallow such pro-landlord devices, at least in unmodified form.
Examples of four types of such clauses follow. They include:
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