Casualty Damage and Restoration-Related Provision

A Casualty Damage and Restoration-Related Provision is a contract provision that outlines the responsibilities, obligations, and rights of the parties involved (typically the landlord and tenant) as a consequence of a casualty event (an event of property damage caused by a casualty event, such as a fire, flood, or natural disaster).

• Context:
  • It can (typically) be in a Casualty Damage and Restoration-Related Clause.
  • It can specify which party (landlord or tenant) is responsible for bearing the costs of repairs and restoration following a casualty event.
  • It can include timelines for notification and commencement of repairs to ensure timely restoration and minimize disruption.
  • It can address the allocation of insurance proceeds in the event of a casualty, determining how these funds are to be used in the restoration process.
  • It can delineate the conditions under which a party may terminate the agreement if the property is deemed uninhabitable or beyond repair.
  • It can outline insurance requirements, specifying the types and amounts of insurance each party must maintain.
  • It can be impacted by depending on the type of lease (e.g., Gross Lease Agreement vs. Triple-Net Lease Agreement) or contract, reflecting the differing expectations and responsibilities inherent in each.
  • It can range from being a Neutral Casualty Damage and Restoration-Related Provision to being a Position-Favoring Casualty Damage and Restoration-Related Provision.
  • ...
• Example(s):
  • Office Lease Agreement Casualty Damage and Restoration-Related Provision (an office lease agreement provision), such as:
    • “In the event of casualty damage not caused by the tenant, the landlord is responsible for all necessary repairs and restorations to bring the leased premises back to its previous condition, at the landlord’s expense."
  • In a Triple-Net Lease Agreement, a clause might read, “The tenant is responsible for all repair and restoration costs associated with casualty damage, subject to the terms of the insurance policy maintained by the tenant."
  • A clause stating, “Should the premises be damaged to the extent that repair and restoration are expected to take longer than [specified period], either party may opt to terminate the lease, with [specified notice period] to the other party."
  • ...
• Counter-Example(s):
  • A provision that ambiguously assigns responsibility for casualty damage, leaving it unclear which party is liable for repairs and restoration.
  • A clause in a residential lease that unfairly places the burden of major casualty damage repair on the tenant, contrary to typical regulations and standards.
• See: Contract Provision, Casualty Insurance, Force Majeure Clause, Lease Agreement Types, Property Restoration.

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