Be Careful When Mentioning Laws by Name in Lease

Every lease should require the tenant to comply with all laws. But some leases we've seen go one step further: They specifically name certain laws the tenant must comply with. For example, your lease may say: “Tenant shall not violate the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).” Owners often add this language to emphasize the importance of compliance with the named laws. But this strategy can backfire, warns Washington, D.C., attorney Desmond D. Connall Jr. If the law you mention is later renamed or replaced by another law, the tenant may argue—and a court may agree—that it's not required to comply with the renamed or new law.

Here's how you can avoid this problem: Give the name of the law in the lease, but say that it's merely one of the laws you want the tenant to follow or not violate, Connall advises. For example, say: “Tenant shall not violate any federal, state, or local environmental laws, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).” This way, if CERCLA is later replaced by a new law, the tenant won't be off the hook. It must comply with the new law and all other environmental laws, he explains.

CLLI Source

Desmond D. Connall Jr.: Partner, Womble Carlyle Sandridge & Rice, 1401 Eye St. NW, Ste. 700, Washington, DC 20005; (202) 857-4400.