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Usually with a 30 day window, the landlord and their appointed experts determine what percentage of the building is damaged. 35% is a common percentage to trigger cancellation of leases.
Note that the "Expert" will determine the damage, but this entity is hired by the landlord. Ensure you are happy with the definition of "Expert" in your lease - it is fine that it is someone that the landlord appoints, but it would be more favorable if it also states "acting reasonably" or that the expert is hired by the landlord and approved by the tenant.
Also note that there is a difference between damage to the building and damage to your suite.
If your premises is unfit for occupancy, there should be no obligation to pay rent on space that is too damaged to use. If the building is damaged but your suite is not materially affected and there are no life safety issues, the landlord will have a case that it should be business as usual during the repair phase.
It has been determined that the building is more than 35% damaged. Now what?
Most leases state that the landlord has the right to cancel the lease and repair the building. Usually there is no commitment for any financial compensation. Damage is most likely caused by fire, flooding or a natural disaster and both you and the landlord are equally suffering.
The best steps that can be taken to protect the tenant in this case is:
Here is some sample wording you may want to consider:
It is agreed between the Landlord and the Tenant that:
(a) in the event of Damage to the Leased Premises affecting access or services essential to the conduct of business in the Leased Premises and if the damage is such that the Leased Premises is rendered not reasonably capable of use and occupancy by the Tenant for the purposes of its business for any period of time in excess of 10 days, then:
(i) from and after the date of occurrence of the damage and until the Leased Premises are again reasonably capable of use and occupancy as aforesaid, Base Rent and Additional Rent shall abate from time to time in proportion to the part or parts of the Leased Premises not reasonably capable of such use and occupancy, and
(ii) the Landlord or the Tenant as the case may be shall repair such damage with all reasonable diligence, but to the extent that any part of the Leased Premises is not reasonably capable of such use and occupancy by reason of damage which the Tenant is obligated to repair hereunder, any abatement of Rent to which the Tenant is otherwise entitled hereunder shall not extend later than the time by which repairs by the Tenant ought to have been completed with reasonable diligence; and
(b) notwithstanding the provisions of subsection 1.1(a) above, if either:
(i) the entire or substantially all of the Leased Premises, or premises whether of the Tenant or other tenants of the Building comprising in the aggregate 35% or more of the Rentable Area of the Building, are substantially damaged or destroyed by any cause (including by the presence of any Hazardous Substance) to such an extent that in the reasonable opinion of the Landlord they cannot be repaired or rebuilt within 180 days after the occurrence of the damage or destruction
then, in either case, the Landlord may at its option, exercisable by written notice to the Tenant given within 60 days after the occurrence of such damage or destruction terminate this Lease in which event neither the Landlord nor the Tenant shall be bound to repair as provided herein and the Tenant shall instead deliver up possession of the Leased Premises to the Landlord with reasonable expedition but in any event within 60 days after delivery of such notice of termination and Rent shall be apportioned and paid to the date upon which possession is so delivered up (but, subject to any abatement to which the Tenant may be entitled under subsection 1.1(a) by reason of the Leased Premises having been rendered in whole or in part not reasonably capable of use and occupancy), but otherwise the Landlord or the Tenant as the case may be (according to the nature of the damage and their respective obligations to repair described in subsection 1.1(a)(ii)) shall repair such damage with reasonable diligence;
Sorry for putting you to sleep!
The only further suggestion we would make is to have the tenant also have the right to cancel the lease, but this is not something that is easily negotiated with a landlord.
Typically this clause is not negotiated at the offer to lease or letter of intent stage - it is most often modified by your real estate lawyer (most tenants to do not make any changes at all to the landlord's standard clause).