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Does the covenant to leave the property “in a clean and neat condition” at the end of a long term lease require the tenant to clean up all its contamination? Or only the contamination that has occurred since the last renewal of the lease? And does the tenant have to pay rent until the property is cleaned up?

In a BC case, CNR v. Imperial Oil, Imperial Oil had renewed its lease many times since 1914, most recently in 1989. According to Judge Ralph, the 1989 lease required Imperial to clean all the petroleum and metal contamination, surface and subsurface, that it had caused since 1914. A property that is contaminated, in comparison to current standards, is not “clean and neat”.

However, CN had the onus of proof. Contamination on part of the property had been properly delineated; this Imperial had to pay for. Having refused to spend $400,000 to delineate the contamination on the rest of the property, CN could not prove how much of it Imperial had contaminated. Nor was CN automatically entitled to rent lost pending the cleanup. CN had to prove that it had tried, and been unable, to rent the property, in order to get damages for lost rent.

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