The "reasonable wear and tear" Exception

Did you know

…that the “reasonable wear and tear” exception often found in the “repair and restoration” clauses of a lease can have costly consequences for a landlord and can also be detrimental to a tenant? The 2004 decision of the Ontario Court of Appeal in Stellarbridge Management Inc. v. Magna International (Canada) Inc. (2004) 71 O.R. (3d) 263 (C.A.), dealt with some of the ramifi cations of the “reasonable wear and tear” exception.

Facts

In 1989 Magna International (Canada) Inc. (“Magna”) leased a new 80,000 sq. ft. industrial building from Stellarbridge Management Inc. (“Stellarbridge”) for ten years for an industrial manufacturing use. With respect to repair and maintenance, the Lease provided for Magna to:

a)  repair and maintain the premises (other than certain structural repairs) subject to an exception for “reasonable wear and tear (not inconsistent with the maintenance of the building as first-class industrial premises having regard to the then age of the building)”.

b)  return the premises to Stellarbridge at the end of the term, in “a good state of repair and maintenance subject to the exceptions herein provided” - i.e. the “reasonable wear and tear” exception noted in (a) above.

c)  restore the premises to their previous condition (i.e. the condition prior to all alterations/changes) subject to “reasonable wear and tear (not inconsistent with the maintenance of the building as a first-class industrial premises having regard for the then age of the building...)”.