“Let me qualify this. Our client leases the building and finds himself with a couple of years until renewal. His tenancy began in 2015 – before lease rates lost their sanity, but I digress. When we originated his deal, the owner was insistent upon a triple net lease – NNN. To review, an NNN lease outlines the base rent and places payment of the extras – insurance, property taxes and maintenance — on the tenant. These are paid separately from the base rent, so the base rent is “net” of these expenses. Some owners collect an estimate of these expenses monthly while others allow the occupant to pay as these charges are due. In our client’s case, the owner bills for a monthly estimate and reconciles any over or under charges next year.
We whipped out a copy of his lease. (Actually, we searched DropBox and accessed a digital version.) We believed we had his answer but wanted to re-acquaint ourselves with any edits that preceded his signature.
We discovered no edits. So, here’s the long answer: it depends.”
If you lease a commercial building, it is important to know with absolute certainty what repairs and maintenance you’re responsible for. If you wait until something breaks to find out, it could put a hurt on your wallet.
To find out what happens in this case, read the story here.
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