If your company leases space in an area impacted by Hurricanes Irma or Harvey and your leased property was affected by either wind or water damage, your landlord is probably doing everything it can to get your building back to normal operations. That said, you should check the following three areas of your lease to ensure that you understand your rights and obligations post-storm.
Interruption of Services
Almost every lease has a clause governing interruption of services which typically encompasses interruption of power, trash removal, et cetera. In most leases, the landlord is not liable for damages or loss of use when the interruption is the result of causes beyond landlord control. Occasionally, however, rent will abate for the duration of the interruption. This can be important to you if your building was not damaged but power is out for a sustained period.
Casualty Repair/Termination/Abatement
Most leases also contain a clause addressing what happens if the building and/or premises are damaged by casualty which would include hurricane. Typically, if your building or premises are damaged, the lease will state that all or a portion of your rent will abate until the premises are habitable for the purpose of doing business again. If your operations are on a higher floor of a building and you have no window damage, this clause may still apply if the building’s lobby level was flooded, necessitating reconstruction or mold remediation. If this activity affects access to the upper floors, you may be entitled to abatement.
Occasionally, if the damage is severe or projected to take more than 6-12 months to repair, the landlord (and occasionally the tenant) may have the right to terminate the lease. This termination right will only be relevant where the damage was quite extensive. Make sure you understand whether your lease grants you the right to terminate and know the notice required to exercise them.
Personal Property Damage
Finally, most leases require the tenant to ensure its own personal property including furniture, fixtures and equipment. If your company’s offices were flooded and personal property was destroyed by a storm, you will need to make a claim with your insurance company to recover these losses. You will also be responsible for procuring replacement furniture and equipment to get operational again in new or restored space.
