This section is from the book "Practical Real Estate Methods For Broker, Operator & Owner", by Thirty Experts. Also available from Amazon: Practical Real Estate Methods for Broker, Operator, Owner.
The frequency of proceedings to take property for a public purpose renders it prudent that the landlord should protect himself against any claim for damages on the part of the tenant, in case the leased premises are taken. The clause providing for this is usually called a "condemnation clause." Such clause provides that, in case the premises are taken by condemnation proceedings, the lease shall cease upon the day that the legal title to the property shall vest in the party instituting such proceedings. Such a clause protects the landlord from any claim on the part of the tenant for loss or damage arising from the termination of the lease.
While the matter of amount of rent to be paid is usually the subject of careful negotiation between the parties, and is finally fixed upon as a reasonable amount under all the circumstances, nevertheless, if condemnation proceedings are subsequently brought, we are very apt to find that the tenant will claim that, by being deprived of the premises, he has lost a bargain. In other words, the tenant, in order to receive damages, is practically compelled to take the position that he is paying less rent than the premises are worth. This contention on the part of a tenant usually raises an acrimonious dispute between himself and the landlord, and it is only fair that the landlord should protect himself, by a proper clause in the lease, from this danger.
The tenant is usually called upon to covenant to quit and surrender the premises in good condition. He is liable to the landlord for any injury done to the freehold, for waste, as it is called, and for breach of his covenants.