General Question

Idknown's avatar

Can a landlord make you pay for their commercial property insurance and property taxes?

Asked by Idknown (1121points) June 2nd, 2011
7 responses
“Great Question” (4points)

I own a small business, and on our lease, we have to pay for ‘our’ part of the commercial insurance, and ‘our’ share of property taxes.

Is this standard? Shouldn’t property taxes and insurance be paid from his pocket as I am paying him rent? Shouldn’t that be his expenses?

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Judi's avatar

It’s called CAM (common area maintenance) and in commercial leases, what is included in CAM is negotiable. In a triple net lease the tenant is responsible for all expenses including taxes and insurance. Commercial is way different than residential as the law expects you to be a more sophisticated consumer and in residential you are more protected because they are dealing with your home.

Adirondackwannabe's avatar

You’re paying them one way or another. Some leases just don’t spell the details out like that. Do you have your own insurance to cover your losses? My guess is his policy only takes care of him.

cazzie's avatar

I made my landlord include it in the base rent price of the shop. Our tax system is transparent, so I knew what his taxes would be by looking up what was paid on the property in previous years. When I was negotiating the lease with him, we dealt with it then, and he added another 500kr to the monthly amount. I told him that I was a small business and couldn’t afford to be presented with an extra bill I couldn’t predict on short notice (I’m a planner from hell when it comes to finances. All those years doing accounting, as least there is ONE benefit in my current life.) He was pissed that I looked his taxes up… (he’s a young guy who has been living off his parents silver spoon and it was his first lease agreement on his first commercial property. He had no idea what he was doing.) and he said to me that he could charge me what ever he wanted in relation to the additional CAM, regardless of what I thought was fair. I countered by telling him he could pull what ever amount he wanted out of his ass and we’d still have to talk about it before it got written on the lease and agreed to.

(Upside is he’s sold the property to a more experienced person, a lawyer, who’ve I managed to make an even better deal with because she knows what she’s doing. She was shocked to hear how this guy treated me, reducing the agreed-to floor plan by one-third from the original walk through and telling me bold face lies about the storage area.) Looking forward to many happy years in my little shop with the three big street-facing windows.

YARNLADY's avatar

Yes, landlords can charge anything they want, as long as the renter is willing to pay. If the price went too high to compete, he would have to adjust his charges accordingly.

perspicacious's avatar

It depends on the lease. What you are speaking of is not uncommon in the commercial RE world.

Neizvestnaya's avatar

It’s negotiable.

Idknown's avatar

Thank you guys – that was really helpful!!!

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