Page 16 - NBIZ August 2021

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Tenant has thoroughly inspected the Leased
Premises and Building. Tenant accepts the Leased First, all commercial lease forms should
Premises and Building in its “AS-IS” condition, with clearly set out the parties’ duties to repair.
all faults, including both patent and latent defects.
Tenant taking possession of the Leased Premises DON’T ALLOW YOUR TENANTS TO
shall be conclusive evidence that Landlord’s work, NEGOTIATE THE LANDLORD’S
if any, has been completed and accepted by Tenant DUTY TO REPAIR IN YOUR
and that Tenant is occupying the Leased Premises
in such AS-IS condition. Additionally, Tenant LEASE FORM.
acknowledges that neither Landlord nor any agent
of Landlord has made (the same being expressly
DISCLAIMED and WAIVED by Tenant) any repre-
sentation or warranty, implied or express, regarding this provision is. I am surprised how often I review a lease
the habitability, condition, merchantability, fitness, that doesn’t contain this important waiver.
or suitability of the Building or the Leased Premises
or any construction, fixtures or personal property BE CAREFUL NOT TO WAIVE THE WAIVER
leasehold improvements. Tenant is accepting all PROVISION.
defects, if any associated with Leased Premises; and It should be noted that any affirmative statement made
Landlord makes no warranty of any kind, express or to the tenant before execution of the lease about the quality
implied, for the Leased Premises (without limitation, or condition of the leased premises if untrue would negate
Landlord makes no warranty as to the suitability of the “AS IS” waiver provision. The leasing and marketing
the Leased Premises for a particular purpose nor as personnel should refrain from making any statement
to the absence of any toxic or otherwise hazardous about the condition of the leased premises or building. You
substances). Tenant’s obligation to pay Rent is not cannot have it both ways. The tenant would not be bound by
dependent upon the condition of the Leased Premis- the “AS IS” waiver provision if it was induced to make the
es or the performance by Landlord of its obligations lease because of fraudulent representations or concealment
under this Lease and Tenant shall continue to pay of information by the landlord or the landlord’s leasing
Rent, without demand, abatement, deduction, offset and marketing personnel as to a defective or inferior
or counterclaim, inspite of any breach by Landlord or condition. In some situations, if the landlord knows about
Tenant of any of their respective duties and obliga- a latent defective condition that would affect the tenant’s
tions under this Lease, whether express or implied. occupancy and fails to disclose that information, the failure
may negate the “AS IS” conveyance if that defect affects the
Or one like this: tenant’s occupancy.

Tenant acknowledges that Landlord has not made MAKE THE WAIVER PROVISION OBVIOUS
any representations or warranties with concerning TO THE TENANT.
the condition or quality of the Leased Premises or The totality of the circumstances surrounding the
Building. Tenant has inspected and accepts the agreement will be examined by the courts to determine
Leased Premises and Building in their present whether the “AS IS” waiver language is an important part
"AS IS" condition as suitable for the purpose for of the lease or just an ancillary “boiler-plate” provision. So
which the Leased Premises are leased. Taking of don’t hide this waiver. You need to make the provision stick
possession by Tenant shall be deemed conclusively out in the lease. The “AS IS” provision should be a separate
to establish that the Leased Premises, Building, and section of the lease. Some forms may put the provision in all
common areas are in good and satisfactory condition caps and/or bolded.
as of when possession was taken. Tenant further ac- A properly drafted "AS IS" waiver provision in one's lease
knowledges that no representations as to the repair will eliminate one of the defenses and claims a tenant may
of the Leased Premises or Building nor promises to raise in a commercial occupancy. N
alter, remodel or improve the Leased Premises or
Building have been made by Landlord, unless such is Brian D. Womac a licensed attorney in Texas since 1985
expressly outlined in this Lease. celebrating 35 years of active practice in commercial real
estate law. He has been board-certified in commercial
By agreeing to lease the premises in “AS IS” condition, real estate law since 1991 and has personally handled
the tenant agrees to make his/her own appraisal of the over 3,000 litigation matters in Harris County, Texas.
bargain and accept the risk that it may be wrong. With His client base consists of corporations, partnerships,
this “AS IS” provision, the landlord makes no assurances, companies, lending institutions, insurance companies,
express or implied, concerning the value or condition of the investors, management and leasing companies, and
leased premises or building. One can see how important others owning real estate.

16 NBIZ ■ August 2021