“As-is” is “Has Been”

A tenant agrees to accept the premises “as-is” a phrase commonly used in the leasing of restaurant real estate, even more so now because of the availability of closed restaurants. It represents an understanding between a landlord and tenant that the Tenant will perform whatever work is required to open a new restaurant on the property.

However commonly used, restaurateurs can improve their deals by reviewing their Letter of Intent templates and omitting this language. Restaurant operators agreeing to accept a premises “as-is” disclaim landlords from some implied warranties, including workmanlike quality, that automatically come with the property in a lease transaction.  In agreeing to “as-is,” the tenant accepts the premises “with all faults” including some that may not be apparent.

Much more equitable when parties have this understanding is the language, “Tenant agrees to accept the premises with no additional work required of landlord.” This simple revision acknowledges that, even though the landlord is not doing any additional work, the agreement continues to convey certain assurances, as previously mentioned.