Thursday, 7 September 2017
Author: Erica Quilter
A natural disaster can have devastating effects on business operations. Whether you are a landlord or a tenant under a commercial lease, it is important to obtain legal advice both before you enter into the lease and in the aftermath of a natural disaster. This article considers some of the issues to discuss with your lawyer.
Before signing a lease – insurance issues
You should discuss with your lawyer who will be responsible for insuring the premises, and what type of insurance must be maintained. The usual position is that the landlord maintains either full replacement or indemnity insurance for certain risks, and the tenant is responsible for paying the premiums (and the excess up to a certain amount) as an outgoing. However, in some instances a tenant may take out the insurance, or there may be an express acknowledgement in the lease that the landlord is not required to maintain insurance. It is important that you discuss these matters with your lawyer so that the lease correctly reflects the agreed insurance position.
After a natural disaster
Most leases contain provisions which will apply in the aftermath of a natural disaster. Some of these are discussed below.
You should contact your lawyer in order to understand your position following a natural disaster, and what your rights and obligations are.
This article touches on some of the issues that may arise between a landlord and tenant under a commercial lease following a natural disaster. As a landlord or a tenant, you will also need to comply with your obligations under building laws and health and safety laws. Your lawyer will be able to advise you on these issues too.
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