Building Better Leases Series – Severability, Limitation on Liability, Time of Essence, & Notices

Building Better Leases


The Severability clause refers to a provision that describes the effect that an unenforceable part of a contract will have on an agreement. Generally speaking, Leases are regularly challenged in court and as time progresses, laws and statues change. Thus, it is possible that certain provisions of the lease may be invalidated over time. This section prevents the entire Lease from becoming invalid if this is the case.

Limitation on Liability

Limitation on Liability refers to the limiting conditions or instances under which the disclaiming party may be held liable for loss or damages. This sections essentially protects the Lessor, stating that the Lessee can only execute on the Lessor’s interest in the Premises (as opposed to other assets the Lessor may have including partners, members, directors, officers, or shareholders). Some lenders require borrowers to take title to properties as a single asset LLC which helps restrict the liability to the Lessor’s interest in the Premises.

Time of Essence

Time of Essence refers to the amount of time both Parties have to perform their obligations under the Lease. These dates and times are not estimations or approximations but rather precise deadlines, so unless otherwise noted, there are no grace periods. This would come into play, for example, if a tenant or landlord had to provide a written notice. If the written notice was provided a day late, they would not be entitled to the rights set forth in the Lease.

It’s important to note that not all aspects of a contract are equally crucial. Therefore, it may be beneficial to consider which clauses require deadlines to avoid causing unnecessary pain to the other party for every detail of the contract.


All Notices are required to be in writing. They are allowed to be delivered in various ways, for example, by mail, facsimile, email, and in person. Sometimes the Lessor will send the Notice multiple ways to ensure it was received. Once the Lessee takes possession of the Premises, the Premises will constitute as the primary address for the Lessor to send Notices to the Lessee. If one of the Party’s wishes to change their address, they can do so adjacent to the Party’s signature where delivery and mail notices are to be recorded. The Lessor may require that copies of notices be sent to certain additional designated parties like their corporate office, attorney, asset manager, corporate real estate department, etc.

The information provided does not, and is not intended to, constitute legal advice; instead, all information is for general information purposes only. Consult an attorney for legal advice.