What are Demised Premises?

Definition: Demised premises are the physical boundaries that identify the property being leased or transferred. These premises explicitly describe what is and what is not a part of the property.

What Does Demised Premises Mean?

A real estate contract involves dealing with a physical property that has to be clearly defined in order to avoid misunderstandings, trespassing situations or abuses. This is the reason why contracts include demised premises, which are a thorough description of the property boundaries to determine what’s part of the property and what’s not.

This is particularly important for places where there are shared spaces such as pools, halls, stairs or lounges that are part of the building premises but not necessarily a part of someone’s property.

On the other hand, there are occasions when companies share warehouse space or even office space with other companies and it is very important that the lease document clearly establishes the demised premises for each tenant to avoid conflicts and disputes. It is important for the tenant to carefully read which areas are defined as the demised premises, since most leases include maintenance duties for them.

Example

Susan and Garret are neighbors in an apartment building. They share one of the building’s floors and adjacent to each of their apartments there is a lounge where a sofa and some chairs are placed. Their lease agreement establishes that this is a shared premise but Susan wanted to redecorate it and she did without Garret’s permission. Since this is not a demised premise that Susan has the right to change Garret was annoyed by the redecoration and he urged Susan to change it as soon as possible.

They discussed the matter and Susan didn’t agreed to change back the decoration. The argument escalated and it was taken to the building’s committee, who decided Garret’s complaint proceeded. The committee determined that Susan had to take off these new decorations, which she agreed to do after apologizing with Garret for unnecessary conflict.