Legal

Demolition Clause

A landlord-friendly lease provision granting the landlord the right to terminate the lease if the building is to be demolished for redevelopment, typically upon advance notice and sometimes with a relocation or compensation obligation.

Extended Definition

Demolition clauses are most common in ground-floor retail leases, older office buildings targeted for redevelopment, and urban core properties. They protect landlord flexibility but expose tenants to unexpected displacement. Well-negotiated demolition clauses include minimum notice periods (typically 6–12 months), relocation rights to comparable space in a nearby building, and/or monetary compensation. Tenants should seek to limit demolition rights by requiring that a building permit actually be issued, or by adding anti-demolition protections during critical business ramp-up periods. The presence of a demolition clause is a material risk item in any lease abstract.

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