Your lease does not specify the conditions under which either party can terminate if the premises are substantially damaged or destroyed. Without this right, you could be obligated to continue paying rent on an unusable space while waiting for a rebuilding process that may take years.
By Angel Campa, Founder · Updated March 2026
Flagged when no casualty termination provisions are found in the lease.
A tenant without casualty termination rights may be required to pay full rent on a fire-damaged space for the 18–24 months it takes the landlord to rebuild. Even with rent abatement during reconstruction, the tenant remains bound to the lease — unable to relocate, sign a new lease, or plan their business operations. In the worst cases, landlords have decided not to rebuild at all while the tenant remained contractually prevented from exiting.
Negotiate a tenant termination right triggered when: (1) damage exceeds a specified percentage of the building value (typically 25–50%), (2) the landlord's estimate to repair exceeds a specified timeframe (typically 180 days), or (3) damage occurs within the last 12–24 months of the lease term. Ensure rent is fully abated during any period the premises cannot be used. Include a "deemed termination" provision if the landlord fails to commence repairs within a specified period.
Not automatically — the lease must include a rent abatement provision for casualty events. Well-drafted leases provide for pro-rata rent abatement based on the percentage of the premises that cannot be used. Without an explicit abatement provision, you may owe full rent even on a space that is completely unusable.
Without a casualty termination right, you may have limited remedies if the landlord fails to rebuild. Negotiate a provision that automatically terminates the lease if the landlord does not commence reconstruction within 90 days of the casualty and complete it within 12–18 months. Include a right to terminate if the landlord notifies you that it will not rebuild.
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