LEASED PREMISES
Contact Neufeld Legal for commercial leasing legal matters at 403-400-4092 / 905-616-8864 or Chris@NeufeldLegal.com
In a commercial lease agreement, the section defining the Premises is arguably the most fundamental clause, establishing the physical boundaries and scope of the tenant's exclusive use. This clause aims to meticulously describe the leased property, distinguishing it from the rest of the building or development (such as common areas, structural elements, or other tenants' spaces). The definition typically includes the municipal address, the specific unit number, and, crucially, a legal description or a reference to an attached floor plan that visually delineates the leased area. For "gross" or "semi-gross" leases, the precise area, often measured in square feet or meters, is paramount, as it directly impacts the calculation of rent, additional rent, and the tenant's pro-rata share of operating costs (TMI or CAM charges). Without a clear and undisputed definition of the Premises, the entire contractual foundation of the lease is jeopardized, potentially leading to disputes over maintenance, utilities, and exclusive rights of occupation.
Beyond mere physical description, the Premises clause and related provisions often address the scope of the grant, which dictates how the tenant may use the space and what associated rights are included. While the primary purpose is clearly stated in the Permitted Use clause (e.g., "retail boutique," "general office space"), the Premises definition implicitly or explicitly addresses ancillary components such as parking stalls, storage lockers, loading dock access, and the right to install signage on the building's exterior. Furthermore, in many multi-tenant commercial settings, especially in enclosed malls or office towers, the tenant’s rights are often non-exclusive outside the defined Premises, meaning common areas, elevators, and lobbies are shared with other tenants and the public, subject to the landlord's rules and regulations. The interaction between the defined Premises and the broader property, including access rights and easements, is critical for the tenant's operational viability, and these supplementary elements must be carefully itemized to prevent future ambiguity.
Finally, the integrity of the Premises clause is intrinsically linked to the financial and practical obligations outlined elsewhere in the lease, particularly concerning condition, repair, and compliance. The agreement will typically stipulate the current "as-is" condition of the Premises upon possession, or detail the specific landlord Work (or Tenant Improvements) required before the commencement date. A well-drafted lease will allocate responsibility for the maintenance and repair of various components, for example, the tenant often maintains non-structural interior elements, while the landlord is responsible for the structure, roof, and exterior walls (the shell). Therefore, the definition of the Premises serves as the territorial line that governs these obligations: anything within the defined space is typically the tenant's maintenance responsibility, and anything outside is the landlord's, subject to specific contractual exceptions. This clarity is essential for managing the property's lifecycle, ensuring compliance with applicable building codes and regulations, and accurately assessing both parties' long-term financial exposure.
For knowledgeable and experienced legal representation in negotiating, reviewing and drafting lease agreements, and protecting your business’ legal rights thereunder, contact lease lawyer Christopher Neufeld at 403-400-4092 [Alberta], 905-616-8864 [Ontario] or Chris@NeufeldLegal.com.
