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THE RUNDOWN

Remember the end before you start: Who will get what when that lease is over?

March 10, 2019

 

Do tenant-installed additional improvements or alterations to the premises become the landlord's property when the lease terminates? What about "trade fixtures" that the tenant installed? And what exactly is a "trade fixture"? 

 

These questions should be addressed when drafting the lease, not when the situation arises. 

If the lease is silent on these issues, you could be in for a costly legal battle to determine who owns the improvements or alterations.  

 

Most leases provide that the improvements and alterations become part of the premises and belong to the landlord.  But you may not want the improvements after the lease terminates.  In that case, you may need a clause to specify that the tenant must restore the premises to the condition they were in prior to the commencement of the lease. 

 

But many alterations and improvements are not, or cannot be, spelled out. Some items may not even exist at the time the lease is executed.  If this becomes a legal battle, the judge will infer from the nature of the property and its use the unexpressed "intent" of the parties.

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