Rental Property Investor · Boston, MA · Member since 2018 · 18 posts · 5 votes
I have a building that is commercial and residential. Tenant lives upstairs and operates business out of lower level. He pays utilities and I pay tax, insurance, snow removal.
If I wanted to give a longer term lease and make it triple net how does that work? Do they just pay the agreed lease amount and I just send them the insurance and tax bill whenever I get it? How do you make sure it’s getting paid?
I have a building that is commercial and residential. Tenant lives upstairs and operates business out of lower level. He pays utilities and I pay tax, insurance, snow removal.
If I wanted to give a longer term lease and make it triple net how does that work? Do they just pay the agreed lease amount and I just send them the insurance and tax bill whenever I get it? How do you make sure it’s getting paid?
Thanks!
You would address this in the lease. Make sure to talk to a commercial real estate attorney so you have the wording the way you want it. Basically you describe in the lease all the costs that are passed through to the tenant. You then bill the tenant but you would pay all the bills yourself directly.
I have a building that is commercial and residential. Tenant lives upstairs and operates business out of lower level. He pays utilities and I pay tax, insurance, snow removal.
If I wanted to give a longer term lease and make it triple net how does that work? Do they just pay the agreed lease amount and I just send them the insurance and tax bill whenever I get it? How do you make sure it’s getting paid?
Thanks!
You would address this in the lease. Make sure to talk to a commercial real estate attorney so you have the wording the way you want it. Basically you describe in the lease all the costs that are passed through to the tenant. You then bill the tenant but you would pay all the bills yourself directly.
Real Estate Broker · Tacoma, WA · Member since 2016 · 545 posts · 252 votes
6y
@Nick Rivers Exactly what @Greg Dickerson said. There are absolute net leases where the Tenant is responsible to pay for those items directly, however, in this case you would be responsible to ensure they are paid and then bill the Tenant directly as "Additional Rent" in the Lease. Echoing Greg again, you will certainly want to engage an attorney to make sure that you aren't crossing any lines with the residential component of the lease. I'm not exactly sure how it works, but I don't think you will be able to pass through 100% of the expenses in NNN since there is a residential component. Again, attorney. A good property manager should be able to answer some questions for you as well.