NNN question - Posted by Luap

Posted by Beachbum on May 08, 2009 at 21:17:39:

Sorry, it is tenant’s responsibility.

Commercial leases are, for all practical purposes, simply a contract, with terms that apply exactly as ultimately interpreted, by a judge. They do not involve Residential Landlord/Tenant laws and responsibilities. There is no concept of “normal wear and tear” in these contracts. It’s not personal, it’s just business.

Sadly, in my experience as a Property Manager, most small business owners never bother to read the terms of the lease, or ask questions prior to signing. They only concern themselves with answering the question “what will it cost me each month?”

I can’t tell you how many times I have seen commercial tenants go ballistic when CAM charges increase, or, as your situation, a major infrastructure component needs replacement or repair.

Even more unfortunately, many Property Managers and most Owners don’t make any attempt to point out these things at lease-up, as they are only interested in securing the tenant. They get your personal guarantee, and then when the time comes, they just shrug and wave the contract in your face. Of course, larger businesses and National Tenants are well aware, and their attorneys keep them generally out of trouble.

The Bottom Line is that it’s called NNN for a reason- basically ALL costs are passed back to the tenant, one way or another. All the Owner pays for is the dirt, and sometimes the structural envelope.

Always remember- in business, EVERYTHING is negotiable. It is far better, as a tenant, to negotiate BEFORE you sign!

FYI, there are some excellent standardized commercial forms on airea dot com.

NNN question - Posted by Luap

Posted by Luap on May 08, 2009 at 15:28:26:

question about commercial lease.

The lease says that its the tenants responsibility to maintain the premise including AC, heating, electrical, and water systems.

The heating system went out, and the repair person says that the system is very old and needs to be replaced. Is that the tenants or landlords responsibility if the unit needs to be replaced?

Re: NNN question - Posted by Jeff

Posted by Jeff on May 26, 2009 at 19:02:31:

When I used to lease NNN retail space as a store owner, I would agree to maintain the mechanical systems (particularly the HVAC) by signing a maintenance agreement with a licensed HVAC company. They would typically come out every quarter. I would not take responsibility to replace a unit and made sure my leases were clear on that.

This could be a big deal enough to argue over the language (maintain vs replace). In the end, you might be able to share the cost with the landlord. Lesson: Read your leases and inspect the premises before you sign.