What Does “Ordinary Wear And Tear” In A Commercial Lease Really Mean?

This post is adapted from an article that was originally published in the Fall 2019 issue of ActionLine, a Florida Bar Real Property and Trust Law Section publication.

Many commercial leases direct the tenant as to the condition in which the tenant must keep the premises during the lease term, or return them to the landlord at the end of the lease term.  It is common for these provisions to carve out “ordinary wear and tear.”  But what does “ordinary wear and tear” mean?  Florida courts have not provided a brightline rule, but they have provided some guidance.

In one case, a tenant sought to use an “ordinary wear and tear” clause to shift responsibility for certain repairs to the landlord.  In ruling for the landlord, the court rejected the tenant’s attempt to rely on the carve-out, ruling that “[t]he exception of ‘ordinary wear and tear’ merely relieves the lessee of any duty to the landlord to maintain the leasehold in a ‘like-new’ condition.”

A different Florida appeals court came to a similar conclusion.  The lease required the tenant to return the premises to the landlord at the end of the lease term “in a safe condition and reasonably good order and repair.”  The trial court interpreted that provision to mean that the tenant had to return the premises “in tenantable and rentable condition so that the premises are returned in reasonably like-new or nearly-new condition, safe and fit for immediate occupancy and rental.”  The appellate court disagreed: “The phrase ‘reasonably good order and repair’ does not imply that the property must be returned in ‘like-new or nearly-new condition.’  Further, ‘reasonably good order and repair’ does not equate with ‘reasonably like-new or nearly-new condition,’ nor does it necessarily equate with ‘fit for immediate occupancy and rental.’”

Recently, a federal court applying Florida law had to consider the meaning of “ordinary wear and tear.”  The lease at issue was for a building developed to be a “Mission Critical Facility,” meaning that the premises “were designed and constructed with extraordinary levels of redundancy and reliability of critical systems, particularly, with atypical levels of redundancy in the power service, water service, emergency power, HVAC, and communications necessary to keep the facility fully operational at all times.”  As a result, the lease had a high standard for the tenant’s care of the premises, requiring that the tenant maintain the premises “in a first class condition and order of repair, except for ordinary wear and tear, and shall promptly make all repairs and replacements of every kind and nature, whether foreseen or unforeseen….”

In ruling for the landlord, the court said: “Under Florida law, where a lease includes an ‘ordinary wear and tear’ exception, that exception does not eliminate the tenant’s obligation to make capital replacements and repairs, which wear out during tenancy and cannot be corrected by ordinary maintenance.”  The court further said that “[c]onditions are not due to ordinary wear and tear where there is significant deferred maintenance or in an instance where systems, components, or equipment are approaching, have reached, or have exceeded their typical expected useful life.”

While Florida courts have given guidance as to the definition of the commonly-used “ordinary wear and tear” exception, they generally look to the exact words used in the lease.  So the lesson is, as always, draft leases with precision.

Leave a Reply

Your email address will not be published. Required fields are marked *