By Kevin Walsh
Most landlords are responsible and do a good job maintaining and repairing their properties. But what do you do if the landlord fails to abide by the terms of the lease to keep its property in good condition and repair?
Recently an institutional client experienced a situation where the landlord refused to repair broken elevators in a building wherein the lease did not include the right to perform any repairs on behalf of the landlord. The situation was particularly disturbing as the client has a wheel chair bound employee who required elevator service in order to access the leased premises. Other arrangements had to be made in order to accommodate the employee and needless-to-say when the lease came up for renewal the client elected to relocate. Going forward the client requires that no matter what size space they lease all leases must have a self-help provision or at a minimum the right to perform emergency repairs.
Leases typically provide that the landlord maintain the common areas (within and outside of the building), the building structure and building systems. Cost for those repairs may be passed through to the building’s tenants as an operating cost or common area maintenance expense. Landlords are often hesitant to allow the tenant to perform any repair to the building. The landlord can be concerned that the tenant will cause a disruption to other tenants in the building or do damage to the building structure or building systems. When negotiating leases the landlord may be willing to limit the right of self-help to certain essential services which we define as electricity, heating and air-conditioning, water, sewer and building systems that are under the landlord’s control that provide telephone service to the building (as opposed to telephone service provided by any particular carrier), or telephone systems that are outside of the building. In drafting the self-help provision I like to specify the items of maintenance and repair that are specifically the landlord’s responsibility. If the tenant believes in good faith that the landlord has failed to perform its responsibility under the lease there is a notice and cure period for the landlord to respond, typically 5 to 10 business days. We carve out from the right of self-help matters that are beyond the landlord’s reasonable control such as acts of God, casualty or condemnation that are typically addressed in other portions of the lease. If the landlord fails to respond within the notice period, the tenant has the right to make the repairs and bill the landlord for the cost of the repair. Invoices sent to the landlord are backed up by reasonable supporting documentation for the expenses incurred by the tenant for the repairs and if the tenant is not reimbursed within 30 to 45 days after incurring the expenses, tenant is entitled to interest on the cost of the repairs at the default rate defined within the lease. If it can be negotiated into the lease, the tenant may also receive a right to off-set the cost of the repairs against base rent until the cost are recovered by the tenant.
In addition to the right of self-help, the client requires the right to perform emergency repairs. Emergency repairs are defined as repairs that are necessary to prevent imminent injury or death to persons or imminent damage or danger to the tenant’s property. The protocol for emergency repairs is to require at a minimum the tenant has the responsibility to notify the landlord’s property manager of the need to perform the repair and to give the landlord a short time period to respond of not more than 2-calendar days.
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