Page 15 - NBIZ August 2021

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.
WAIVER OF THE IMPLIED
WARRANTY IS SIMPLE.
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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