Part 19*: What is an “indemnification clause” in a commercial lease?

Most commercial leases include an indemnity clause whereby the Tenant indemnifies the Landlord for any claims arising out of the lease. This clause is also sometimes referred to as a “hold harmless” provision. Indemnification or hold harmless provisions, in plain English, mean that if a third party gets a judgment against the Landlord, the Tenant is responsible for paying that judgment. For example, if a retail shopper slips and falls in a store and sues the owner of the building, the Tenant will pay the judgment.

This clause is often negotiated between the parties. For example, the Tenant may ask to carve out Landlord negligence, or liability outside the demised Premises. The Landlord may also ask the Tenant to defend and indemnity the Landlord using counsel reasonably acceptable to the Landlord. These are legal terms that require careful consideration and negotiation.

*Thank you for taking the time to read this article. This article is part of our “Commercial Leasing for Non-Lawyers,” a Blog Series on Commercial Leasing. Other aspects of commercial leasing transactions in New York are discussed in other Parts of this series.

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