Low, Ball & Lynch’s

WEEKLY LAW RESUME

November 17, 2005 Issue   By: Mark Hazelwood

Contracts - Tenant’s Duties Must Be Expressly Stated in Lease

ASP Properties Group v. Fard, Inc.

Court of Appeal, Fourth District

 (November 3, 2025)

The meaning of a contract, including a lease, depends upon the parties’ expressed intent.  When there is ambiguity in contract language, extrinsic evidence may be considered to ascertain the actual intent of the parties.  In this case, a landlord, Jim Lin, and a tenant Fard, Inc. (“Tenant”) entered  into a 10 year lease for commercial property.  Tenant intended to operate an auto sales and repair shop.   The term of the lease was from 1997 to 2007. 

Paragraph 4 of the lease provided: “REPAIRS AND MAINTENANCE: Tenant shall maintain at his sole expense and without contribution from landlord, the premises in good and safe condition, including,  but not limited to plate glass, electrical wiring, plumbing and heating installation.”

In July 2000,  Lin and Tenant amended the lease.  The amendment provided that Tenant would cure any condition, or perform any necessary modification, maintenance or repairs, as needed, to keep the building compliant with City codes.  Paragraph 4 was amended so that the Tenant was additionally obligated to maintain the roofs of the building.  In return, Tenant received a $500 reduction in monthly rent.

In 2003,  Lin sold the commercial property to Plaintiff ASP Properties Group (“ASP”).  After purchase, ASP hired a building consultant to inspect the premises.  The consultant determined that the two roofs on the building were leaking badly and needed to be replaced.  ASP demanded that Tenant replace the roofs or quit its possession of the premises.  Tenant refused and ASP filed an unlawful detainer action.  A court trial was held.  The trial court entered judgment for the Tenant, finding that the life expectancy of the roof was 15 years.  The lease was entered into in 1997, which was about four years beyond the life expectancy of the roof.  The Court held that while the parties negotiated for the tenant to repair and maintain the roof; they did not negotiate for the Tenant to replace the roof.  ASP appealed the decision.  The Fourth Appellate District affirmed.

On appeal, ASP Properties contended that the trial court erred in interpreting the Lease and Amendment not to require the Tenant to install new roofs.  ASP specifically argued that the duty to replace the roof was consideration for Tenant receiving the $500 reduction in rent per month.

In reaching its decision, the Court of Appeal set out to determine the mutual intent of the parties.  Such intent is to be inferred, if possible, solely from the written provisions of the contract.  If there is ambiguity in the terms of the agreement, then extrinsic evidence may be offered by the parties to prove intent.  Here, the trial court permitted extrinsic evidence on the parties intended meaning of the language in the Lease and the Amendment.  

After considering the evidence, the Court of Appeal concluded that the Tenant’s duty of maintenance could only be reasonable construed as requiring the tenant to maintain the roofs in the conditions they were in at the time the Lease and Amendment were entered into.  Had the parties intended Tenant to assume the obligation of replacing the roofs, one would have expected such a term to be expressly stated in the Lease.  Further,  case law supports a conclusion that absent an express provision, a Tenant’s obligation to maintain or repair does not include an obligation to replace an old, dilapidated roof with a new roof.   Therefore, the judgment was affirmed.

COMMENT

This case is consistent with prior decisions which have held that absent express language in a lease agreement, a tenant is not obligated to replace a roof.  A covenant to keep a premises in good repair does not ordinarily include the restoration of a part of a building which has become run-down.  

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