Tenant Responsible for Necessary Improvements

An owner leased an office building to a tenant who planned to run a restaurant there. Before it could do so, the city told the tenant that the building's parking lot and roof drainage system needed certain improvements to comply with the local building code. The tenant asked the owner to pay for these improvements because they were to the building's exterior, but the owner refused. So the tenant paid for the improvements and then sued the owner for reimbursement of those expenses.

A California appeals court ruled that the tenant was responsible for any necessary improvements to the building's exterior. The court explained that, since the lease was an “as is” agreement—that is, the tenant agreed to take the building in the condition it was in—the tenant was responsible for all necessary improvements, whether to the building's interior or exterior [Papa John's Pizza v. Ha].