What follows are our general observations and opinions. This is not legal advice, it is not a definitive statement of California law, and every situation depends on its own facts.
If mold appears in space you lease for your business in Los Angeles, the answer to who has to fix it is almost always found in your lease rather than in a statute. Commercial tenants do not get the habitability protections that residential tenants do. The implied warranty of habitability and the repair-and-deduct machinery in the Civil Code are residential doctrines, and our view is that a commercial tenant who assumes those rules apply to a retail suite on Ventura Boulevard is going to be disappointed at exactly the wrong moment.
What governs instead is the allocation of repair and maintenance obligations the parties negotiated, read alongside the surrender clause, the casualty clause, the rent abatement provision and the indemnity. In practice we find the answer is buried across four or five separate sections that were drafted at different times and do not obviously speak to each other.
Start With the Repair Clause, Then Read the Definition of the Premises
Most Los Angeles commercial leases we review put the landlord on the hook for the structure, the roof and the building systems serving the property generally, and put the tenant on the hook for everything within the premises. That sounds clean until you ask where the premises stop. If the lease defines the premises to the interior face of the walls, then the pipe inside the wall is the landlord’s and the drywall it soaked is arguably yours. If the definition runs to the midpoint of the demising walls, the line moves.
The second thing we look at is whether the tenant’s obligation is qualified. A repair covenant that carves out damage caused by the landlord’s negligence, or by a failure of a building system, reads very differently from an unqualified obligation to keep the premises in good order and repair. In a triple-net single-tenant building the tenant may well have taken the roof, in which case a leak that produced mold is a tenant problem no matter how unwelcome that is.
Why the Water Source Usually Decides It
Mold is a symptom. In our experience the fight is rarely about the mold itself and almost always about where the water came from, because that is what maps the problem onto one clause or the other. A failed roof membrane, a cracked supply line in a common wall, a slab leak, or a neighboring tenant’s overflowing floor sink point one way. A tenant’s own dishwasher connection, an unvented commercial kitchen, or a tenant-installed sink point the other.
This is why we push clients hard to establish causation early, before the wall is opened and the evidence is gone. Photographs, a plumber’s written findings, and a moisture reading taken by someone independent are worth far more at that stage than they will be six months later when the parties are exchanging letters.
The Clauses That Decide What Happens to Rent
Even where the landlord clearly owns the repair, the more pressing question for a business is usually whether rent keeps running while the space is unusable. That turns on provisions people skim at signing:
- Rent abatement. Many leases abate rent only on a casualty as defined in the lease — fire, flood, earthquake — and a slow leak may not qualify. Some abate only after a waiting period, and some only where the tenant is wholly unable to operate rather than partially displaced.
- Casualty and termination thresholds. Leases commonly let one or both parties terminate where the damage cannot be repaired within a stated number of days. Whether a mold remediation counts, and who estimates the timeline, is worth settling in the drafting.
- Landlord self-help and cure rights. If the landlord fails to repair, does the tenant have any right to do the work and offset the cost against rent, and is that right capped?
- Interruption of services. Many leases expressly disclaim any abatement or landlord liability for interruption of building services, which a landlord will point to.
- Indemnity and the waiver of subrogation. These determine who ends up paying for third-party claims — an employee or a customer, for instance — and how the insurers sort it out between themselves.
Employees, Customers and Your Own Exposure
A commercial tenant with a mold problem has a second exposure that residential tenants do not: the people who come into the space. If a customer or an employee complains of a condition in premises you control, the question of who owes the repair to the landlord does not answer the question of who owes a duty to that person. Our view is that a tenant should treat notice from anyone in the space as something to document and act on immediately, whatever position it takes with the landlord about the repair bill.
It is also worth reading the insurance section carefully. Mold and fungus exclusions are common in commercial property and general liability policies, and where coverage exists it is often sub-limited to an amount that will not go far once a remediation contractor is involved. We would rather a client learn that at renewal than at the point of a claim.
What We Would Do in the First Week
Give written notice, in the form and to the address the notice provision requires — a text to the property manager is not usually notice, and defective notice is one of the most avoidable ways a good position gets weakened. Photograph everything before any work starts. Get an independent moisture and source assessment rather than relying solely on the landlord’s vendor. Keep a running record of days closed, staff sent home, and revenue affected, because if abatement or damages are ever on the table that record is the claim. And read the lease before sending anything that could be characterized as an acceptance of responsibility.
Fees
Commercial lease review and lease disputes of this kind are handled on an hourly or flat-fee basis rather than on a contingency. For a lease review we can usually quote a flat fee once we have seen the document and know its length and complexity; for a dispute with a landlord we generally work hourly, with the arrangement set out in a written fee agreement before we begin.
If you have mold in leased commercial space in Los Angeles and the lease is not giving you a clear answer, we are happy to read it and tell you where you actually stand. Call us at (310) 556-9692.
Related reading: our commercial lease review resource page and our toxic mold resource page, along with who pays for HVAC and roof repairs under a commercial lease — the clause that most often decides a water-intrusion fight; and why we suggest a lease review before signing — the points that are cheap to fix in draft and expensive later.
This article reflects our general views and opinions rather than legal advice, and it is not a definitive statement of California law. Reading it does not create an attorney-client relationship between you and our firm. Every matter turns on its own facts, and we would encourage you to speak with a lawyer about yours.
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