Removal and Restoration Obligations

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Careful consideration is owed to how a tenant’s removal and restoration obligations are expressed under a lease. The scope of each partes’ goals (and ultimately, their obligation) are a product of the tenancy at hand. While boilerplate obligations might be a good starting point, adjustment may be required to account for unique circumstances and to curb potentially unintended or undesirable outcomes.

Removal

Terminology

i.  Chattels: items not attached to the premises by any means other than their own weight.  

ii.  Leasehold Improvements: items constructed on and attached to the real property that are intended to become a part of it.

iii.  Trade Fixtures: items which can be severed and are for the purpose of the tenant’s business.

Items left behind may become the property of the landlord and may be stored/disposed of as the landlord sees fit.

Restoration

i.  Analyze lease for relevant standard (e.g., “base building condition” vs. “broom swept condition”). 

ii.  Typical requirement for the tenant to repair any damage caused by the installation or removal of items it must remove.

Special Considerations

i.  Absent an intention to the contrary, leasehold improvements become property of the landlord without any requirement for the tenant to remove them. 

ii.  If the tenant is installing “non-standard” leasehold improvements (e.g., raised flooring, vaults, server rooms), consider specifying that the tenant must remove them (if the tenant is not otherwise required to remove leasehold improvements). 

iii.  Careful consideration when using the terms “reasonable wear and tear” – it may lead to unexpected consequences. 

These materials were prepared by Christine Shahverdian & Dylan Armstrong for the 2025 ICSC Canadian Law conference held in Toronto Ontario and is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.