These are my own general observations on repair and maintenance provisions in California commercial leases, drawn from the agreements I review for business tenants. Not legal advice, not a definitive statement of the law, and every lease allocates these obligations differently.
The clause that most often turns a workable lease into an expensive one is not the rent. It is the paragraph assigning responsibility for the HVAC system and the roof. In my experience this is where tenants unknowingly agree to fund the replacement of equipment they will never own.
The distinction that matters is between maintaining and replacing. Servicing a rooftop unit twice a year is an operating cost and a reasonable thing to ask a tenant to carry. Replacing a twenty-year-old unit that fails in year two of your lease is a capital expense on the landlord’s asset — and in a triple-net lease with broad repair language, you can end up paying for it.
How the obligation usually gets shifted
It is rarely stated bluntly. It generally arrives in one of three ways.
- Broad language in the tenant repair clause. A requirement to keep the premises “in good order, condition and repair” without carving out capital items, latent defects, or ordinary wear and tear.
- Through CAM. The lease makes the landlord responsible, then includes capital repairs in the operating expenses you reimburse. You pay either way; it just arrives as a line item.
- The surrender clause. A requirement to return the premises in the same condition as delivered, reasonable wear and tear excepted — or, worse, without that exception. That can mean paying to replace systems at the end of the term.
What I ask for
A replacement carve-out. The cleanest fix is language that the tenant maintains and repairs, but the landlord is responsible for replacement of the HVAC system, roof, and structural and building systems. If replacement is required during the term for reasons other than tenant misuse, that cost sits with the owner.
An amortization cap if a carve-out is refused. If the landlord insists on passing capital costs through, they should be amortized over the useful life of the item, with you paying only the portion falling inside your term. A tenant three years into a five-year lease should not fund a roof with a twenty-year life.
A dollar cap per occurrence or per year. Simple and easy for a landlord to accept. Anything above the cap is the landlord’s cost.
A warranty period at the start. I generally ask that the landlord warrant the HVAC, plumbing, and electrical are in good working order on delivery and remain the landlord’s responsibility for the first six to twelve months. If a system fails immediately, it was failing before you arrived.
Do the inspection before you sign
This is the practical step most tenants skip. Pay an HVAC contractor a few hundred dollars to inspect the units and give you their age and remaining life before you sign. If the answer is that a unit is eighteen years old with a typical life of fifteen to twenty years, you now know a replacement is likely during your term — and you can negotiate about it while you still have leverage, rather than discovering it in August when the unit dies.
The same applies to the roof. Ask when it was last replaced and whether there is a remaining warranty. Landlords often have this information readily available, and asking signals you are reading the document carefully.
Document the condition at delivery
Photograph everything before you take possession, and record equipment model and serial numbers. If your lease requires you to surrender in the condition delivered, you want evidence of what that condition actually was. I have seen surrender disputes turn entirely on whether the tenant could show a system was already near end of life on day one.
Where possible, attach a condition report as an exhibit to the lease itself. A signed exhibit is far stronger than photographs produced years later.
If you have a lease or LOI and want the repair and surrender provisions reviewed before you sign, call (310) 556-9692. This work is handled on an hourly or flat-fee basis.
Related reading: CAM charges and what you actually pay · Assignment and subletting · Commercial lease review and negotiation
As above, my observations and opinions rather than legal advice. Reading this does not create an attorney-client relationship.
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