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A tenant has a modified gross lease of a small commercial warehouse in San Fernando, CA. During the rainy seasons of 2017-2018 and the very wet 2018-2019, the tenant reported, on multiple occasions, leaks from the roof. These never seemed to have been properly addressed.

More recently, there was a severe enough leak that caused some damage by splattering as it dripped. The water is a dark rust color, and stains everything it touches.

More recently, water trapped in the ceiling insulation (which is held up by a plastic barrier) proved to be too heavy for the plastic and it ruptured, leaking all over numerous belongings. The landlord is unwilling to cover this damage, telling me that's what the tenant's insurance is for. The tenant has insurance that should cover this, but one of the few obligations the lease places on the landlord is to keep the roof in good working order.

What are the legal options? It's very hard to search for information for commercial leases; almost everything online is about residential leases.

EDIT:

Is the landlord typically liable for damage to contents in a situation like this (that is, when they've failed to maintain the roof in proper working order, and the resulting water ingress damages the contents)? Or is it some kind of standard practice that the tenant's insurance should pay, and then the insurance company deals with the landlord?

The next question is, what kind of attorney handles this sort of thing?

The most important thing is to get the landlord to fix the roof to prevent further damage. Talking to other tenants suffering similar damage, it seems they're reluctant to fix it, and downright unwilling to pay for damages.

  • Remove the personal perspective from the question and it will be a valid question. Otherwise this might get closed as "seeking legal advice". – Digital fire Apr 3 at 5:04
  • How is this advice? I'm asking a question, certainly NOT offering advice. Or do you mean any answer would end up being legal advice? Where does one draw the line when answering a question about the law? – Rick Apr 3 at 5:05
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    It's simple modifications to the question. For example; "I have a modified gross lease.." to "A tenant has a modified gross lease..". Basically try to frame it in the third party not directly tied to yourself. It is a very good question, just need to be framed differently. – Digital fire Apr 3 at 5:08
  • Fascinating. Okay. – Rick Apr 3 at 5:09
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Generally speaking, keeping the roof in working order is the obligation of the landlord in a commercial modified gross lease. It would honestly be quite unusual for the tenant's insurance to cover it, and it would likewise be unusual for the landlord not to have insurance that covers an incident like this to the extent that it is insurable (usually, deterioration of a roof is not covered by anyone's insurance unless it is caused by a specific event like a hail storm, or toilet seat from an aircraft that blew up in mid-flight crashing down on it (if you miss the allusion to "Dead Like Me", don't sweat it)).

If the tenant's insurance does pay, it would normally have a right to subrogate against the landlord (i.e. sue the landlord for the money that it was out), but many commercial leases have an anti-subrogation clause that prohibits a tenant's insurer from pursuing a subrogation claim against the landlord (not all leases have such a term, but many do), since this is really the landlord's responsibility.

The landlord ordinarily would be liable to the tenant for damage foreseeably caused by the failure to the landlord to do what the landlord is obligated to do, but this is complicated because the tenant has a duty to mitigate damages if reasonably possible. So, rather than just allowing its stuff to be water damaged, the tenant is obligated to do what is necessary to prevent the damage (at least, if this is cheaper than allowing the damage to occur) and then sue for the cost of mitigation, rather than for the damage itself.

Another point to consider is that in many commercial leases, the landlord's obligation to repair is not triggered until a demand is made, the landlord refused, the tenant gives a written notice of default to the landlord, and the landlord does not address the problem within a "cure" period of a specified number of days after receiving the notice of default. A review of the lease for such provisions is in order.

If the landlord is allegedly in default, it may be possible to bring a lawsuit to compel the landlord to do the repair, or better yet, for the tenants to give the proper notices, then to make the repair, and then to withhold rent in the amount of the alleged damage or to sue the landlord for the cost of mitigation and to collect a judgment by withholding rent as a setoff against the judgment. If the lease is long enough for the litigation to run its course and still have enough of the lease left to setoff against rent due to collect, that may be a viable option.

what kind of attorney handles this sort of thing?

Real estate, business law, commercial litigation and business litigation would all be common specialties for a law firm that handles this kind of dispute to advertise.

Lawyers who primarily do criminal law, immigration law, custody cases, personal injury, personal bankruptcy cases, and defense of residential evictions, would typically be inappropriate.

The lawyer will not be cheap, but usually, in a commercial lease situation, the dollar stakes are considerable.

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