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Sunil Annam
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Who does repairs in NNN

Sunil Annam
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  • Plano, TX
Posted Apr 25 2023, 18:03

In light industrial,  say if HVAC broke, should the landlord repair?  Or the tenant does and landlord doesn't need to know?

if landlord wants to have HVAC serviced every year, does tenant pay for it?

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Chris Seveney
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Chris Seveney
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Replied Apr 25 2023, 20:21

@Sunil Annam

Read the lease - it will say. That’s the only answer someone can give

Typically though on a NNN lease tenant pays for repairs and is responsible for hvac. Landlord should not care about hvac system as it's not their system

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Eliott Elias#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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Eliott Elias#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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Replied Apr 26 2023, 03:34

A triple net lease should hold the tenant responsible for all maintenance. Check your lease for exclusions.

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Brock Mogensen
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Brock Mogensen
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Replied Apr 26 2023, 07:06

All comes down to the lease. And sometimes repairs such as those might not be super clear in the lease. Generally for repairs such as those, LL would do the repair, then bill back to the tenants as CAM. Or if it is a larger repair, might bill back right away. 

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Ronald Rohde
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Ronald Rohde
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Replied Apr 26 2023, 14:29
Quote from @Eliott Elias:

A triple net lease should hold the tenant responsible for all maintenance. Check your lease for exclusions.


 And LL responsible for capex.

Its a wonderfully blurry line, only lawyers can help you read it

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Will B.
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Will B.
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Replied Apr 30 2023, 21:05
Quote from @Ronald Rohde:
Quote from @Eliott Elias:

A triple net lease should hold the tenant responsible for all maintenance. Check your lease for exclusions.


 And LL responsible for capex.

Its a wonderfully blurry line, only lawyers can help you read it


 Right on! DETAILS, DETAILS, DETAILS. I have NOT seen many lease agreements obligating the tenant for capital expenditures, can remember truthfully. Also, some owners think dumping all expenses into CAM is the solution. And that depends on the lease agreement, are there caps on CAM expenses? READ THE LEASE.  

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Cody J Leivas
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Cody J Leivas
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Replied May 1 2023, 16:04

The lease will spell it out. 

If it's multi-tenant, you can put the servicing expense in the CAM. I would put together a maintenance contract for the HVAC. It may be LL responsibility but it's more likely that it is on the tenant, which they are responsible for the service/maintenance of the equipment. As the LL you will still want to make sure they are keeping their HVAC serviced because if they vacate, they might do so with a broken HVAC and the LL will likely have to fix it. In general, if the tenant is responsible for certain parts of the building, make sure they are fixing those items periodically. If/when they leave, you will want a well-functioning building not one that is going to cost an arm and a leg to get leased.  

If the lease doesn't spell it out you may want to get an amendment or add the proper language to the next lease. 

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Ronald Rohde
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Ronald Rohde
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Replied May 2 2023, 12:02
Quote from @Will Bockoven:
Quote from @Ronald Rohde:
Quote from @Eliott Elias:

A triple net lease should hold the tenant responsible for all maintenance. Check your lease for exclusions.


 And LL responsible for capex.

Its a wonderfully blurry line, only lawyers can help you read it


 Right on! DETAILS, DETAILS, DETAILS. I have NOT seen many lease agreements obligating the tenant for capital expenditures, can remember truthfully. Also, some owners think dumping all expenses into CAM is the solution. And that depends on the lease agreement, are there caps on CAM expenses? READ THE LEASE.  


 Its certainly possible for the tenant to pay capex, we routinely do that for 10 year or longer leases, it just depends.