9.20 A. Casualties

• Jurisdiction: New York

A. Casualties

Many leases have clauses allowing the landlord to terminate the lease after a minor casualty affecting the building, even though your client’s space remains quite usable. This clause gives the landlord an opportunity to force tenants out in a rising market or to force tenants to renegotiate unrelated parts of their leases before it will agree to restore the damage. It also exposes your tenant to a loss of its improvements and the value of the lease if the landlord’s lender refuses to allow insurance proceeds to be used for rebuilding after such a casualty.

Negotiate your client’s lease to ensure that the building owner is obligated to restore the building and your client’s space...