In a typical shopping center, does the TENANT or OWNER handle issues with the roof, parking lot, and mechanical systems of the building?
I’m assuming the owner pays for the replacement of these things while the tenant pays for maintenance issues that arise within its individual suite as part of a NNN lease.
The answer to that questions is…it depends on the lease. Traditionally, in a NNN lease, the tenant will pay for all of those items.
But in commercial leases, everything is negotiable. You have to check the lease for the CAM (common area maintenance) expenses.
Regards,
Patti Porter
No such thing as a typical shopping center. Who pays what is ofcourse outlined in the lease. In a NNN or Net Lease the tenant would pay taxes, insurance, and all or part of the maintainence/replacement. In a NN the tenant pays only taxes and insurance and the owner pays for maintainence/ replacement. I’ve never heard of a gross lease in retail but your area might be different.
Pretty much it’s up to the tenant and owner to decide. Commercial tenants are all in different circumstances so don’t expect a boilerplate lease. It’s a given that utilities are paid by the tenant so they pay exactly what they use, no more, no less. Common area maintainence (parking lot, sidewalks, roof, exterior, dumpsters, etc) are usually paid for by the owner, and then reimbursed by the tenants based on their percentage of occupancy.
We have a 20k SF Comm. building in So Cal and have 1 of 3 units being a national NNN tenant.
We re-roofed earlier this year, cost was around $60k. The NNN picked up $20K of the bill. They occupy about 1/3 the SF of the building. They don’t mind, it’s a tax write-off for them.
Yes, your lease is the definitive source for what was agreed upon. Hopefully your property manager did a good job and can explain what the conditions for tenant participation in repairs are.
rws