Lack due to renovations

In lease agreements for premises or industrial warehouses, it is common for the tenant to carry out some adaptation works to the premises according to their needs. However, if the works are significant, it is usually agreed that at the end of the contract they will benefit the premises.

It is also common to agree that, for a few months, the tenant will not pay the rent (precisely because they will be covering some works that will later benefit the premises). In these cases:

• There is a direct relationship between the landlord's waiver of collecting a certain number of monthly payments and the tenant's obligation to carry out the agreed works.
• Therefore, in case of non-compliance, the owner may choose between being paid the unpaid rent or demanding the execution of the works as agreed, without prejudice, in both cases, to the compensation that corresponds to them for the proven damages.

 

For these purposes, the lease agreement must indicate, at a minimum, the deadline for the works, the necessary permits, the renovation budget, the quality specifications, and the plans for the final result.

At the end of the contract, the tenant may not request additional compensation for the cost of the works carried out, as these will benefit the property.

In any case, it should be noted that:

• If the tenant does not carry out the works within the grace period, the owner may choose to demand their execution, as agreed, or demand the full payment of the unpaid rents. If after the notification the tenant still does not comply, the owner may terminate the contract (and continue to claim the payment of the rents).
• The owner will have the same options if the works carried out exceed or differ from those authorized, without prejudice to their right to demand, at the end of the contract, that they benefit the property, without the tenant being able to claim any compensation.

Our professionals will advise you on drafting the lease agreement and those clauses related to the execution of the works and the rent concession.