Chapter 4 - § 4.3 • ACCEPTANCE OF THE PREMISES

• Jurisdiction: Colorado

§ 4.3 • ACCEPTANCE OF THE PREMISES

The premises clause of a lease typically will contain a provision regarding the tenant's acceptance of the premises. The first part of such a clause usually states whether the landlord, the tenant, or both will be performing work in the premises before the tenant takes occupancy. If work is to be performed, the description of such work, the process for accomplishing it, and the terms and conditions applicable to it usually are set forth in another document, referred to as the "work letter," which may be separate from the lease or, more commonly, is an exhibit to it (see Chapter 26 of this book).

While the work letter usually has a detailed procedure for acceptance of the premises, the premises clause commonly contains several general statements relating to acceptance. If the lease contains a work letter, the parties will want to be sure that the acceptance language in the premises clause and the terms and conditions of the work letter do not conflict.

The second part of the acceptance of the premises usually contains some sort of "as is" language. The landlord usually wants the tenant to state unequivocally that there are no expectations regarding the condition of the premises other than are expressly stated in the lease. The goal of this provision is an agreement that "what you see is what you get," unless the lease provides otherwise.⁶

From a legal standpoint, the "as is" clause aims to negate certain implied warranties that the law has imposed on landlords. Some leases will name, and expressly negate, certain of these implied warranties, such as the implied warranty of habitability. While Colorado does not recognize an implied warranty of habitability in commercial leases,⁷ making an "as is" clause less important than in states that do, it still is good practice for landlords to include one because it serves to disclaim any representations regarding the property.

A strong tenant will reject the "as is" clause and require the landlord to warrant the condition of the premises. Generally speaking, the warranty will state that the premises and all building components and systems are in good order, condition, and repair, and comply with all laws (usually calling out, in particular, building codes, fire codes, and the Americans with Disabilities Act (ADA)). The landlord also may be required to warrant the environmental condition of the property, often calling out, in particular, the absence of asbestos-containing materials...