One important issue to consider when either drafting a commercial lease as a landlord or reviewing and negotiating a commercial lease as a tenant is how the leased premises will be surrendered at the end of the lease term. Typically at a minimum, the leased premises will have to be surrendered in “broom clean” condition (i.e. with no trash or rubbish in the space) with the removal of all of Tenant’s personal property (moveable furniture, moveable equipment and inventory) from the leased premises.
There may be further obligations imposed by the landlord, such as removing some or all of the alterations performed by tenant and/or restoring the property to a certain condition. This could result in substantially higher costs associated with surrendering the space than a tenant would otherwise expect, particularly if it involves removing certain (or all) alterations made to the leased premises and repairing damage caused by such removal.
As a tenant, it is also important to document the condition of the leased premises prior to actually surrendering it to the landlord. In the event there is a dispute over the condition of the leased premises when it was surrendered, it is invaluable to have objective evidence of the condition (i.e. photos, videos, etc.). This can be important even if the landlord’s representative walks through the leased premises and verbally assures the tenant that the condition is acceptable.
[Back to Commercial Leasing FAQs]