Many of our clients voice concern about waiving statutory rights in leases. Gregg Pasternak is an attorney. He specializes in the proper documentation of office and retail leases on behalf of our clients. Below are his thoughts on the common waiver language in found in typical California leases:
California leases typically contain language in a number of provisions which states that Tenant waives its rights under certain statutes of the California Civil Code. Clients often worry that these waivers may result in the loss of important rights, and often do not understand the purpose or effect of such waivers. However, they are almost always benign and should not be a cause of concern.
The concept behind the waivers is simple. The lease sets forth, in significant detail, the rules governing the contractual relationship between Landlord and Tenant. If Tenant does not agree to any of the terms contained in the lease, it is free to negotiate those terms before signing the lease. What landlords want to avoid is the situation where the parties fully negotiate and agree upon a lease provision, and then years later Tenant takes advantage of a Civil Code section to exercise rights it wouldn’t otherwise have or impose additional obligations on Landlord. Further, most of the statutes landlords ask tenants to waive concern statutes that were primarily enacted to regulate residential leases as opposed to commercial ones. The following are the most typical statutory waivers contained in California office and retail leases:
1. Repair and Maintenance
Tenant waives its right to make repairs at Landlord’s expense under Sections 1941 and 1942 of the California Civil Code; or under any similar law, statute, or ordinance now or hereafter in effect.
This section deals with a landlord’s obligation to make a dwelling habitable and what landlord’s obligations are in terms of repair and maintenance of a building. The habitability language generally is not applicable to commercial space and Landlord’s obligations to repair and maintain should be adequately covered in the lease provision.
2. Damage and Destruction
The provisions of this Lease constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, the Building or any other portion of the Real Property, and any statute or regulation of the state in which the Building is located, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, and any other statute or regulation, now or hereafter in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building or any other portion of the Real Property.
These sections contain somewhat broad and vague language which provides that when something is destroyed, the party that “hired” (rented) the particular thing (the Premises) can terminate the contract regarding what was destroyed. Tenant’s termination rights in the event of a casualty should be adequately covered in the lease provision.
Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of The California Code of Civil Procedure.
This section provides the Court the right to terminate the lease if an “essential” part of the property is taken for public use (eminent domain). The parties’ respective termination rights in the event of a casualty should be adequately covered in the lease provision.
It’s an attorney’s job to evaluate any express waivers of legal rights contained in a lease, not the broker’s, and when legal questions arise, we always defer such questions to counsel. However, as mentioned above, the general concept behind the waivers can often contribute to unnecessary or overblown concerns.