Commercial leases commonly contain a tenant’s covenant to maintain the leased premises in a state of repair at least equal to that in which the leased premises were found at the commencement of the lease. However, this covenant to maintain and repair is in most cases qualified by the phrase “reasonable wear and tear excepted”. How is the tenant’s obligation to maintain the leased premises tempered by the reasonable wear and tear exception?

The law in Canada with respect to the interpretation of “reasonable wear and tear” was stated in Haskell v. Marlow, [1928] 2 K.B. 45:

“…[r]easonable wear and tear means the reasonable use of the house by the tenant and the ordinary operation of natural forces. The exception of want of repair due to wear and tear must be construed as limited to what is directly due to wear and tear, reasonable conduct on the part of the tenant being assumed…”  

Thus where reasonable wear and tear is excepted, the tenant must still act reasonably by ensuring that the leased premises do not suffer more than the operation of time and nature would effect and by applying reasonable efforts to keep the leased premises as near as possible in the same condition as at the commencement of the lease.  

In considering what wear and tear is reasonable, the courts have considered factors such as the age, nature and use of the building, the duration of the tenancy, and the nature of the use for which it was intended and to which it was actually put during the tenancy.

For instance, in Kreeft v. Pioneer Steel Ltd. (1978), 8 B.C.L.R. 138, the landlord sued its former tenant for damages in relation to cracks in the warehouse floor and parking lot caused by the tenant’s storage of steel. The tenant in Kreeft successfully brought itself within the reasonable wear and tear exception because the court found that the strength of the warehouse floor for the purpose of storing steel had been in the minds of both the landlord and tenant at the beginning of the lease.

In Darmac Credit Corp. v. Great Western Containers Inc., 1994 CanLII 9213 (ABQB), the tenant operated a drum reconditioning business on the leased premises. The terms of the lease provided that the tenant would make all necessary repairs and replacements to both the exterior and interior of the building, and restore the leased premises to the physical condition existing at the commencement of the lease, reasonable wear and tear excepted. When the tenant terminated its lease after nine years, there were such extensive roof leaks that the roof had to be replaced. The landlord brought a claim for environmental and structural damage to the leased premises.

With respect to the claim for damage to the roof, the landlord in Darmac successfully proved on a balance of probabilities that the roof deterioration was not caused by reasonable wear and tear and in fact occurred prematurely due to the tenant’s business activities, specifically the reconditioning process, which was not discussed with the landlord at the time the lease was negotiated. The roof in question had a normal life expectancy of 18 to 22 years but the building was approximately 12 years old at the time it had to be replaced. The court found the tenant responsible for one‐third or six of the 18 years by which the roof aged prematurely, and therefore liable for one‐third of the roof replacement cost.

What does this mean for landlords and tenants? A landlord will not be prejudiced by the wear and tear exception if the wear and tear arises from use or misuse which was not contemplated at the time the lease was negotiated. If the deterioration of the leased premises is not a “reasonable” consequence of the use to which the leased premises should have been put, the tenant should be responsible. On the other hand, although the wear and tear exception does not relieve a tenant of its obligation to maintain the leased premises in the same condition as at the commencement of the lease, it does qualify this obligation by applying a standard of “reasonableness” which acknowledges the natural deterioration of the leased premises over time. The interpretation of the reasonable wear and tear exception therefore involves the consideration of multiple factors and the outcome of any claim involving the exception will vary on a case‐by‐case basis. To avoid uncertainty in the application of the concept and language of the wear and tear exception in circumstances where it is critical to one party or the other that the leased premises or a portion thereof be maintained to a certain level, the parties should expressly include in the lease specific details regarding the level and state of repair required.