Cadden & Fuller LLP
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Who pays to repair a commercial property? 

On Behalf of | Apr 20, 2023 | Commercial Real Estate |

One issue that can come up with commercial properties is when repairs need to be made. The owner may want the tenant to make the repairs since the tenant is the one who is actually in the building every day, using it for their business. At the same time, that tenant may want the owner to make repairs because they are the one who actually owns the property and benefits most from the repairs.

So whose obligation is it? It all depends on the lease.

A triple-net lease

For instance, in a standard lease, the obligation usually remains with the owner. However, owners can use a triple-net lease, which shifts this obligation to the tenant. It’s very important for both tenants and landlords to understand exactly what type of lease they are signing and what costs they’ll be obligated to pay. Other costs that may be included in these types of leases include are property taxes and insurance payments, for example.

A maintenance and repair clause 

Another option that landlords will sometimes use in a lease is a maintenance and repair clause. This is similar to a triple-net lease, but it doesn’t address additional areas, like insurance or taxes. If a tenant has agreed to take on this obligation via a maintenance and repair clause, they cannot expect the property owner to make those repairs.

As you can imagine, things like this sometimes do get complicated, especially when there is a disagreement or confusion over exactly what the lease stipulates. It’s important for those involved in such disputes to understand what legal steps they can take and what options they have.