Section 12 Protection of Landlord From Liability

• Library: Real Estate Leasing and Landlord-Tenant Actions and Remedies 2011

Many landlords will require that the tenant hold the landlord harmless from environmental liabilities, property damage, and personal injury claims arising out of the tenant’s occupancy of the leased premises. Environmental Issues and Federal Regulations Affecting Real Estate (MoBar expected publication date of Fall 2011) contains a more thorough discussion of environmental issues relating to leases. It is reasonable for the landlord to require a suitable indemnity clause and to require adequate liability insurance. From the landlord’s standpoint, the indemnity, and the liability insurance, should cover claims arising from the actions of not only the tenant, but also the tenant’s:

employees; agents; customers; and suppliers,

as well as others who come onto the premises as a result of the business operations of the tenant.

Environmental indemnity provisions sometimes require the tenant to indemnify the landlord against all environmental matters during the term of the lease, including those caused by third parties not related to the tenant. This exposure could, for example, include liabilities arising from the actions of a third party dumping hazardous materials on the site. A tenant should carefully consider whether it should agree to be responsible for these liabilities. At a minimum, these indemnity provisions should exclude claims arising from the actions of the landlord and, for multi-tenant properties, the actions of other tenants.

Absent an express provision in the lease, the tenant has no obligation to insure the leased premises. Mitchell v. K.C. Stadium Concessions, Inc...