Homeless person broke glass at my NNN leased building in Major city
My tenants called me to let me know that a homeless person broke their front windows overnight. We filed a police report and I asked them to file an insurance claim. They are all supposed to have insurance but 2/3 of the tenants do not. My question is am I on the hook for the windows? I thought since it’s a NNN Only thing I’d be on the hook for is roof. Please let me know thanks
[{"id": "ijkwaq8", "text": "The lease is NNN yet 2/3 of them don\u2019t have insurance? Sounds like you could be on the hook for not making sure they had policies in place, but the lease most likely says it\u2019s on them since that isn\u2019t structural etc.", "replies": [{"id": "ijkwvur", "text": "I will review the lease and double check. Can I fix it and send my tenants a bill for it afterwards?", "replies": [{"id": "ijkx11o", "text": "Not sure. Depends a lot on what the lease says. I would consult with your attorney.", "replies": [], "depth": 3}, {"id": "ijlr1e3", "text": "This may just be me being petty, but you could file it away and refund the damages from the deposit. At the end of their lease, as long as it's itemized, I believe it's allowable", "replies": [{"id": "ijm393w", "text": "You're not being petty.", "replies": [], "depth": 4}], "depth": 3}, {"id": "ijlvmci", "text": "Your lease should specify how this plays out. Not all NNN leases are identical, so there's no \"one way\" this is to be handled. I'd expect your lease to say you can fix the issues your tenants are responsible for and charge them back, but if they're not even securing insurance, I'd be concerned about their ability to pay for the bill.\n\nYou should also be demanding that they provide you with proof of insurance immediately and, depending on the situation, sending them a default notice to reserve your rights under the lease. Your real estate lawyer should be able to help you with these steps and anything else they think you should address.\n\nFinally, not sure if you have a separate property/asset manager that you're working with, but you gotta plug the hole here. Should never be in a situation where your NNN tenants aren't providing the required insurance. Your asset isn't going to be producing a return for you if it burns down and there's not an insurance policy to pursue....", "replies": [{"id": "ijmy1er", "text": "This is correct", "replies": [], "depth": 4}, {"id": "ijp0l2a", "text": "Shouldn\u2019t I be insuring my building anyway, along with the tenant being required to insure their business?", "replies": [{"id": "ijqt9v2", "text": "Yes - because it eliminates gaps (or the potential for gaps) like the one referenced by OP. But make sure your insurance is not primary, so your tenant's insurance is on the hook first. Should lower your insurance premium and ensure that your insurance companies don't end up fighting over who's responsible.", "replies": [{"id": "ijqxfhs", "text": "\u201cBut make sure your insurance is not primary\u2026\u201d\n\nThat\u2019s interesting.  how will I know whether this is the case?  Do I need a conversation with my agent?\n\nI don\u2019t have any specific knowledge of my tenant\u2019s policy, and so I don\u2019t know if I\u2019d consider his coverage adequate.", "replies": [{"id": "ijr37m9", "text": "Talk to your agent. My leases specify that my tenant's insurance will be primary, so it should be in their policy.\n\nYou should be demanding your tenants give you certificates of insurance and I'd expect your lease to require this.", "replies": [{"id": "ijr7hm6", "text": "Thank you For the info!  I\u2019ll be rewriting my lease arrangements soon!", "replies": [{"id": "ijr8gyl", "text": "Following up on one comment you made - your lease should also provide minimum insurance coverage requirements, which you'd want to check against the coverage shown in the certificate of insurance your tenant will provide when they move in and annually thereafter. Your agent can help you figure out the types of insurance coverage and reasonable minimum amounts.", "replies": [], "depth": 9}], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "ijmzmjt", "text": "Even if you can, I'd suggest you consult with them first, do they want you to do that or do they want to get their own person?  If they have to pay, they may have their own person that they prefer.  For my own lease as a tenant, I know it's in my lease that I am responsible for any broken windows but I have my own person and would be suspicious and unhappy if the landlord took action like hiring their own person without asking and then trying to force me to pay their price which may be higher than my person.  Also having worked in the construction industry in the past, I know how common kickbacks are.", "replies": [], "depth": 3}, {"id": "ijn6pyo", "text": "That usually requires notice for failure to comply with their lease. Not always.", "replies": [], "depth": 3}], "depth": 2}, {"id": "ijm320o", "text": "No doubt the tenant **should** have insurance, but I don't see how them not having insurance has any bearing on whether or not it's on the tenant.  Which it probably is.", "replies": [], "depth": 2}], "depth": 1}, {"id": "ijkysz2", "text": "Most NNN leases I\u2019ve seen tenants are responsible for glass breakage.   Premises can be secured with s sheet of plywood temporarily if you have a maintenance person. \n\nI wouldn\u2019t call glass company as tenant may say it is landlord\u2019s expense cause you called them.\nSo yes, read your lease.", "replies": [{"id": "ijl1wzh", "text": "Okay I got my Maintaince guy to cover with plywood. Now just held up because I don\u2019t think I\u2019m the one supposed to be paying for it. Thanks", "replies": [], "depth": 2}], "depth": 1}, {"id": "ijll5aj", "text": "Depends what your lease says for LL and tenant responsibilities as well as reimbursements. It is usually written in the lease if you have a large tenant and the lease was written well", "replies": [{"id": "ijllibm", "text": "3/5 tenants I inherited through the previous owner. The 2/5 tenants that I put in, with my leases, they are on the hook for it. Just the 3 tenants that I inherited I am not familiar with the lease so I will reread it this afternoon. If the lease doesn\u2019t mention it, what does it mean?", "replies": [{"id": "ijlngix", "text": "It\u2019s up to interpretation and you should consult with a broker you trust or an attorney to review. Likely insurance will be on the hook so read that clause too", "replies": [], "depth": 3}, {"id": "ijlsnqj", "text": "You should perhaps have a real estate attorney help you with the lease covenants.", "replies": [], "depth": 3}, {"id": "ijmpdyo", "text": "Still need certificate of insurance even if you inherited them. Honestly you should get in upon closing.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ijlyiua", "text": "I have had glass broken on my unit 7 times in the last 2 years. My insurance as a tenant covers it. The tenant should have insurance, if he does not- I would assume he covers it out of pocket. It is $3500 for a 4x4 replacement here in Ontario.", "replies": [], "depth": 1}, {"id": "ijm5seg", "text": "How do you come here and expect any of us to know? READ YOUR LEASE. If language is silent, try to go half and half on replacement.", "replies": [], "depth": 1}, {"id": "ijm80iw", "text": "I work strictly with NNN leases. Most NNN Leases have language where this type of repair falls under tenants duty to maintain. \n\nGoing forward, you should make sure each tenant is insured. This requirement for the tenant also protects you in a way. They won\u2019t break the bank and go under for issues like this. As large glass windows can be $10k.", "replies": [], "depth": 1}, {"id": "ijmnsh1", "text": "I\u2019m in Massachusetts. The liability and general insurance outlined in our leases are the type you obtain only with a business insurance policy. \n\nIt\u2019s illegal to conduct business in Massachusetts without an active business policy. Our leases include the tenant must provide a Certificate of Insurance annually upon renewal or establishment of a new policy, i police those. They have 30 days past expiration, and I tell them at day 14 I will have to issue a eviction default on day 30 to protect us,  then I send a notice they are in default of their lease . \n\nYou are likely liable as the landlord if they do not have insurance for anything that goes on inside your space otherwise (while the Cert of Insurance should list you as Additionally Insured, this process should be outlined in the insurance clause in the NNN agreement)\n\nSo if they are bar for example and they over serve someone who kills someone in a DUI, but doesn\u2019t have insurance, they will sue you in Massachusetts for liability since you didn\u2019t enforce the Clause that ensures a tenant is carrying the proper certifications and insurance to operate in your building. You let them over serve otherwise and operate illegally. \n\n\nThe lease should also outline what you are and are not responsible for. I had some teenage kids break the showroom windows at a tenants space that was NNN in 2020. The lease outlined we were responsible for the roof, the exterior walls and the foundation and it outlined that the tenant maintained/replaced  everything else in the space including hvac and windows. \n\nMy ownership team stood thier ground and did not replace the windows. If your tenants are responsible, they should replace the windows within 14 days. \n\nIf they don\u2019t have insurance, they should use thier own reserves, and you should issue a lease violation on the lack of insurance. If they don\u2019t replace you can issue another lease violation and build an eviction case (if they don\u2019t have insurance and don\u2019t take care of the space\u2026 (and bill back in CAMS at the end of the year) they aren\u2019t as good of tenants as you think\u2026 someone will do that and pay on time) and replace yourself and invoice the tenant. \n\nGood luck", "replies": [], "depth": 1}, {"id": "ijmqz9u", "text": "Are you sure you know what NNN means?", "replies": [{"id": "ijmyxkd", "text": "I don\u2019t think he does. He said he\u2019s responsible for roof. That alone makes it not a NNN lease.", "replies": [{"id": "ijnapke", "text": "I think I found the residential guy pretending to be a commercial guy. \n\nYou do realize that owners being responsible for exterior  maintenance is not uncommon? It is entirely dependent on the property and tenant. The longer you spend in this industry, the more you will see that every deal is unique, especially if you focus in multi-family. The things I have seen\u2026why did I choose c class multi-family!", "replies": [], "depth": 3}, {"id": "ijnj00g", "text": "If landlord is only responsible for roof, I always thought it was an NNN lease, if not NNN lease what is it?", "replies": [{"id": "ijnl10m", "text": "NN (doubt net)", "replies": [{"id": "ijnldj4", "text": "Thank you good sir", "replies": [{"id": "ijnljbg", "text": "Anytime. Feel free to DM if you\u2019d like to discuss your issue. I\u2019ve dealt with similar situations in the past.", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ijmysfg", "text": "Consult an attorney and next time make sure tenants provide you with proof of insurance", "replies": [], "depth": 1}, {"id": "ijn5xg8", "text": "I literally had two guys draft a purchase contract on one page on a notepad and sign one time. I also had a contract over 85 pages long that covered EVERYTHING. The point being, your contract/lease with them could say anything. You need to refer to it. If you aren\u2019t savvy with interpreting one, reach out to your lawyer. Depending on your relationship with your broker, they may look at it and give their opinion for free, but most of us are not lawyers!", "replies": [{"id": "ijn8sq1", "text": "Thank you I reviewed the leases that I inherited them under and it says they\u2019re responsible.", "replies": [], "depth": 2}], "depth": 1}, {"id": "ijnmq4p", "text": "Before signing a lease, ask for proof of insurance.", "replies": [], "depth": 1}, {"id": "ijntc3i", "text": "Definitely make them fix it with an inspection if they are responsible, but get proof of insurance asap - requiring insurance should absolutely be in the NNN lease.", "replies": [], "depth": 1}, {"id": "ijpnxcb", "text": "that's a tenants problem unless your lease was written by an idiot.", "replies": [], "depth": 1}]