Repair and Maintenance Costs

This clause defines which party is responsible for paying repair and maintenance costs for equipment, facilities, or property used under the commercial contract. It distinguishes between routine maintenance (regular upkeep like cleaning or filter changes) and major repairs (significant fixes due to damage or failure), and specifies whether costs fall on the property owner, tenant, service provider, or are shared. This clause is essential because repair and maintenance expenses can be unpredictable and substantial, and disputes over who should pay can escalate quickly. Without clear allocation, one party may incur unexpected costs or feel unfairly burdened, potentially leading to service degradation, breach claims, or contract termination.

Explicitly separate routine maintenance from major repairs and assign clear responsibility for each category. Define maintenance standards and frequency expectations, and establish a threshold dollar amount above which major repairs trigger different procedures (e.g., competitive bidding or joint approval). Include provisions for emergency repairs that require immediate action without prior approval. Require the responsible party to maintain insurance or reserves for major repairs, and establish a process for documenting all work performed. Consider requiring preventive maintenance schedules to minimize costly emergency repairs, and clarify whether the responsible party can delegate work to third parties and at what cost.