## Facts

- A commercial building in New Braunfels, Texas, was constructed for a playground-equipment business and exceeded 20,000 square feet.
- The local fire code led the fire marshal to recommend, but not require, installing a sprinkler system; the recommendation was not implemented.
- The business was sold to two employees, who then leased the building from the founder/owner as landlord.
- The written lease stated the tenant accepted the premises “as is,” expressly waived all warranties, and disclaimed any landlord warranties regarding fitness or suitability.
- The lease allocated responsibility to the tenant to obtain insurance covering fire-related loss and to perform maintenance and repairs.
- The lease contained a holdover clause providing that holding over without written consent would create a month-to-month tenancy under the lease’s terms to the extent applicable.
- After the lease term expired, the tenant remained in possession and paid rent monthly; the landlord accepted rent.
- A fire later destroyed the building; the landlord’s insurer paid for the building loss, and the tenant’s insurer paid the tenant for contents and business interruption.
- The tenant sued the landlord for damages, alleging defective wiring and the absence of a sprinkler system, among other theories tied to the premises’ condition.

## Issues

1. Whether a commercial landlord’s implied warranty of suitability may be expressly disclaimed, and whether the lease language here barred the tenant’s implied-warranty claim.
2. Whether the lease’s “as is” provision barred the tenant’s tort and related claims based on the premises’ condition by negating causation.
3. Whether, during the post-expiration month-to-month holdover tenancy, the original lease terms—including the “as is” clause and warranty disclaimers—continued to govern.

## Decision

- The Texas Supreme Court affirmed summary judgment for the landlord.
- The court held that the implied warranty of suitability in a commercial lease may be contractually waived and was expressly disclaimed here.
- The court held that the tenant’s “as is” agreement barred claims based on the premises’ condition, including negligence-type theories, because it negated causation.
- The court held that the holdover tenancy was governed by the original lease terms to the extent applicable, including the “as is” clause and warranty disclaimers.

## Legal Principles

- In Texas commercial leasing, an implied warranty of suitability exists but may be expressly disclaimed by clear contractual language.
- An enforceable “as is” clause allocates the risk of defects to the tenant and can negate causation for claims premised on the property’s condition, including tort claims.
- Where a lease provides that holdover creates a month-to-month tenancy under the lease’s terms, the risk-allocation and disclaimer provisions generally continue during the holdover period.

## Conclusion

The court enforced the parties’ risk-allocation choices in a commercial lease, holding that clear “as is” and warranty-disclaimer language waived the implied warranty of suitability and barred tort and related claims based on the premises’ condition, and that those provisions remained effective during the month-to-month holdover tenancy.


Gym-N-I Playgrounds, Inc. v. Snider, 220 S.W.3d 905 (Tex. 2007)