Does your lease have a "demolition clause"?....

One of my long time clients was just dropped a “bomb”…Apparently for years their lease has had a “demolition clause” and their landlord just announced that they were “demolishing” the building and they had to get out in 180 days…

Apparently they just did not notice this clause in what they thought was a “standard” lease…This could destroy years of hard work…So best you folks take a look at your own leases…

I read my entire lease. I really can’t imagine glossing over the word ‘demolition’. DTA

Readers: If you take just one thing from this situation please know that there is NO SUCH THING as a “standard lease”!!!

Anyone who says there is is either ignorant or selling something. A lease is a contract. A contract is a mutually binding agreement between two parties. It contains whatever terms the two parties agree upon, so READ IT, make changes that you need and don’t sign it if you can not get what you need. A landlord wants a tenant. You will never have more leverage to get what you want than you have before you sign the lease.

If you are not very comfortable with doing so on your own have an attorney help you and please do not use the attorney your sister used for her divorce! Each area of law is a specialty and having a family law attorney do your lease work is like asking a breakfast cook from the place next door to cover a shift on your make-line on a busy night! Just because they have a good idea what goes on in a kitchen does not make them a pizza cook.

A demolition clause is not common but it will exist in leases where re-development is a possibility the landlord may want to be able to take advantage of. Assuming you are willing, at all, to take on such a property, one common approach would be for the lease contract to require the landlord to cover re-location costs including a new build out in a comparable location if the clause is exercised. There may be a sliding scale of obligation from the landlord depending on how long you have been there . Landlords don’t just offer that up, it is something one asks for in the initial negotiation. Attorneys do not generally know about those kinds of deal points either which is why having a TENANT REPRESENTATIVE broker working with you when you sign a lease is a good idea. (This is what I do when I am not writing posts in PMQ)

The “demo clause” is actually very common up here in Canada. I passed on two potential sites for
our second location due to it. As far as I am concerned your lease is actually for the length of the
notice required under the demo clause. Period. i.e. that 5 year lease is actually a 90 day lease…
It is very sad that a small independent? is being caught off guard with this. I feel for them.