Page 15 - NBIZ August 2021
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WARRANTY OF SUITABILITY             “AS IS” AND THE WAIVER               provision. Likewise, the representations
        FOUND IN ALL LEASES.                PROVISION.                           of the landlord as to the condition of the
           Absent any provision to the contrary,   First, all commercial lease forms   leased premises should be clearly artic-
        the commercial leased premises are   should clearly set out the parties’   ulated in the lease. All landlord forms
        conveyed with the implied warranty that   duties to repair. Don’t allow your ten-  should contain the provision that the
        the leased premises shall be suitable for   ants to negotiate the landlord’s duty to   tenant accepts the leased premises in
        the tenant's intended purpose. This war-  repair in your lease form. Just stay away   "AS IS" condition. The provision should
        ranty covers latent defects like physical   from changing your preapproved repair   be similar to one of the following:
        or structural defects which could be in
        addition to those items which the land-
        lord has the duty to repair. This implied
        warranty without a waiver can cause
        many problems for the commercial land-
        lord if defects or adverse conditions are
        present after your tenant takes posses-
        sion. A simple “AS IS” provision can save
        time and money should the tenant claim
        issues with the leased premises.
           Tenants often claim the landlord
        violates the implied warranty of suit-
        ability when the landlord pursues the
        defaulted tenant for rents owed. This
        claim along with the defense of failure
        to mitigate are the number one claim
        filed against landlords. Landlords
        should strive to take this defense and
        claim away from the tenant using a
        good lease form that contains a strong
        “AS IS” provision. Having that “AS IS”
        provision cuts off the tenant’s ability
        to argue the landlord is in default.
        Landlords simply shouldn’t provide
        tenants with any situation that will
        allow tenants to create defenses and
        counterclaims against the landlord. All
        commercial landlords should include
        an “AS IS” clause that states specifi-
        cally the express waiver of the implied
        warranty of suitability.
           Absent fraud in the inducement of
        the lease signing, a tenant can effec-
        tively waive the implied warranty of
        suitability when it is expressly stated
        in the lease. What does that mean?
        Short of lying to the tenant about a
        known defect, the tenant can waive the
        implied warranty of suitability.
           What is needed for the waiver? The
        courts have provided the draftee with
        many case law decisions on how a com-
        mercial tenant can waive the implied
        warranty of suitability. The waiver
        needs to be drafted carefully, but it is
        not hard to achieve a successful waiver.

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