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Question

Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result of the specific and unique use of thePremises by Lessee as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof, provided, however that if such Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds 6 months' Base Rent, Lessee may instead terminate this Lease unless Lessor notifies Lessee, in writing, within 10 days after receipt of Lessee's termination notice that Lessor has elected to pay the difference between the actual cost thereof and the amount equal to 6 months' Base Rent. If Lessee elects termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination date at least 90 days thereafter. Can anybody explain this in simple terms? Thanks

Submitted: 25 days and 20 hours ago.
Category: Legal
Value: $38
Status: CLOSED
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State/Country relating to Question: California

Accepted Answer

Thank you for contacting Just Answer.

 

Basically, this says that if for the specifc use of the premises (this sounds like a commercial lease) the lessee must expend capital (money) in greater proportion as to tenants in general, the Lessee will be responsible for the costs. However, if such capital expenditures are required during the last 2 years of the lease, and the total cost exceeds 6 months of the base rent, the Lessee can notify the Lessor that he has elected to terminate the lease, unless the Lessor notifies the tenant, in writing, within 10 days after receipt of the termination notice, that he has elected to pay the difference between the actual cost of the expenditures and the amount of 6 months rent. If the Lessee elects to terminate the lease, they must immediately cease use of the premises and provide the Lessor with written notice of a termination date at least 90 days in the future.

 

By the way, I would imagine also that "Capital expenditures" is defined somewhere in the terms of the contract.

 

Hope that helps.

 

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Expert: RobertJDFL
Pos. Feedback: 100.0 %
Accepts: 
Answered: 10/27/2009

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2+ years as an attorney with experience in criminal defense, family law, estates and personal injury

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