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Commercial Leases: Clauses that Survive a Commercial Lease Expiration

Georgia law controlling the rights of a tenant after the expiration of a commercial lease is an area of the law that is only very recently expanding. This series of blog posts is designed to give you a brief summary of some of the issues that may arise when a tenant stays on a rented property past the expiration of a lease. Specifically, this series will cover issues that regard the effectiveness of certain general terms and conditions of the expired lease. Several questions may arise in this situation:

  • What provisions of the lease, if any, remain enforceable upon the lease's expiration?
  • What provisions of the lease were valid to begin with?
  • Do these provisions apply to only the landlord or to their agents as well?
  • Who is considered an agent of the landlord?

Under Georgia law, when a lease ends but a tenant maintains possession for an unspecified amount of time, the tenant becomes a tenant-at-will.[1] At this time, the lease, even though expired, will still control to some extent:

One who is a tenant at will by virtue of his holding over after the expiration of the term of his lease holds the premises subject to the general terms and conditions specified in the lease, except so far as modified by mutual agreement.[2]

EXPIRATION OF LEASE IN GEORGIA

Georgia law provides that upon expiration of a lease, the portions of the lease which survive the expiration of the lease term are the "general terms and conditions of a lease . . . those indispensable to a continuing landlord/tenant relationship . . . [or those] necessary in order for the landlord/tenant relationship to continue."[3] At a minimum, these indispensable terms and conditions include, "provisions for rent and repairs by the landlord and tenant."[4] Examples of such provisions continuing after the end of a lease are "provisions obligating a tenant to pay for damages to the premises occurring while the tenant was in possession[5] and provisions requiring the tenant to pay a proportional share of the landlord's operating costs, including taxes, maintenance, security, and insurance.[6]

However, Georgia courts have held that provisions including "a contractual right of first refusal to lease the property again was not a general term or condition of the leases because it is not a term or condition that is necessary in order for the landlord/tenant relationship to continue."[7] While a contractual provision may be enforceable during the lease, such a provision is not necessarily required for the landlord/tenant relationship to continue.[8]

Thus, provisions that address rent, operating costs, and damage to the property by the tenant will survive the expiration of the lease.



[1] O.C.G.A. § 44-7-6 (2007).

[2] Colonial Self Storage, etc. v. Concord Properties, 147 Ga. App. 493, 494(1) (1978) .

[3] Mariner Healthcare, Inc. v. Foster, 280 Ga. App. 406, 409 (2006) (citing Gully v. Glover, 190 Ga. App. 238 (1989)).

[4] Gully v. Glover, 190 Ga.App. 238, 240(2), 378 S.E.2d 411 (1989).

[5] Midtown Glass Co., LLC v. Levent Indus., Inc., 316 Ga. App. 422, 729 S.E.2d 556, 557-59 (2012) (citingGully, 190 Ga.App. at 240(2), 378 S.E.2d 411).

[6] Midtown Glass Co., LLC v. Levent Indus., Inc., 316 Ga. App. 422, 729 S.E.2d 556, 557-59 (2012) (citingRadha Krishna v. Desai, 301 Ga.App. 638, 640–641(1), 689 S.E.2d 78 (2009)).

[7] Midtown Glass Co., LLC v. Levent Indus., Inc., 316 Ga. App. 422, 729 S.E.2d 556, 557-59 (2012) (citingMariner Healthcare, 280 Ga.App. at 409(2), 634 S.E.2d 162).

[8] Midtown Glass Co., LLC v. Levent Indus., Inc., 316 Ga. App. 422, 729 S.E.2d 556, 557-59 (2012) (citingMay Dept. Store v. Center Developers, 266 Ga. 806(1), 471 S.E.2d 194 (1996)).

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