By: Rand Campbell
A commercial property lease may contain a rent abatement provision, usually stated in the terms of the lease contract. For example, if the leased property is damaged, the rent abatement provision may allow the tenant to suspend their lease payments or reduce their rent until the landlord repairs the property.
Rent abatement provisions typically protect the tenant if the property is damaged by fire, flooding, or natural disasters such as earthquakes, hurricanes or tornadoes. They may also protect the tenant if the local government mandates property evacuations.
For example, if you are leasing a commercial property for $2,000/mo. and three of the six offices are damaged by a fire which reduces the value of the leased property to $1,000/mo., the landlord may be required to abate (i.e. reduce) your rent to $1,000/mo. until the landlord repairs the three damaged offices.
Rent abatement is negotiable and it’s preferable that you incorporate rent abatement terms into your lease before signing it. If you have an existing lease, it may already provide terms for the abatement of your rent. In unusual circumstances, like we are facing currently with COVID-19, even if a lease agreement does not include a rent abatement provision, it may be worthwhile to both the commercial tenant and landlord to negotiate some period of rent abatement (which can come in different forms).
If you are preparing to sign a new lease or are uncertain if your existing lease covers rent abatement, you should contact your attorney.
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