Commercial landlords often try to maintain as much flexibility with their tenants as possible in order to allow themselves the opportunity to redevelop their properties in the future. The method for achieving such flexibility typically comes in the form of a demolition or "demo" clause contained in the landlord's standard form of lease. The "demo" clause is intended to give a landlord the unilateral right to terminate the lease if the landlord wishes to demolish, alter, or redevelop the property.

Landlords and tenants alike have probably already seen, heard, or read about the surge of redevelopment in the industry. Thanks to the pandemic, the trend is bound to continue well into the future. As a result, now is a good time to take a closer look at the "demo" clause.

A Material Term

It is well established in law that for an agreement to lease to be binding, the following essential elements need to be clearly identified:

  1. the parties;
  2. the premises;
  3. the commencement date;
  4. the duration of the term;
  5. the rent; and
  6. any other material terms (which have subsequently been defined by case law).


Commercial Leasing Bulletin: Landlord Redevelopment Rights – The Details Matter! (

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.