Addressing Abatement Clauses in New Office Leases

Office owners are looking into lease modifications that will address several of the tenant issues that have cropped up during the pandemic. Among the top issues that office owners have faced, abatement is high on this long list. Office owners should consider lease modifications so as not to inadvertently provide abatement rights to tenants.

“Casualty provisions usually only apply if the physical structure of a premises has been damaged, but it might be argued that COVID-19 contamination constitutes physical damage, or that the closure of the premises due to COVID-19 constitutes a casualty,” Andrew Ouvrier, partner at Cox, Castle & Nicholson, tells GlobeSt.com. “In order to avoid this interpretation, office landlords may want to expressly provide that a casualty requires damage to the physical structure of the premises, and to provide that the mere closure of the premises and/or the building does not result in a casualty. Office landlords may also want to expressly state that condemnation does not include a closure of the premises or building in order to comply with governmental orders or public health and safety recommendations.”