Up in Smoke?

Posted on in Commercial Real Estate

Can your tenant negligently start a fire in the leased premises and walk away without liability? While it has not happened in Virginia yet, Bradley Defoe of Varnum LLP in Detroit recently wrote about a Michigan Court of Appeals unpublished opinion (Gautheir v. Elkins, Docket No. 317347) in which the Tenants' minor child started a fire in the leased residential unit. The Court held that the Tenants were not liable to the Landlord for damage to the residential unit because nothing in the Lease indicated that the Tenants could be liable to the Landlord if they were negligent and responsible for a fire that damaged the premises. The lease did require the tenants to maintain the rental unit, and there was no indication that this is or is not applicable to commercial leases. Mr. Defoe noted that when Michigan Court of Appeals cases are not published, they are not binding on other Michigan courts, but could be considered persuasive in future cases.

The solution? Be certain that your leases, whether residential or commercial, expressly state that the tenant is liable for its negligence that results in damages to the leased premises.

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