Parking lot repair for Commercial tenant
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[{"id": "dpw0k7g", "text": "When is the lease up? Can you use it as an incentive to renew or extend the tenant?", "replies": [], "depth": 1}, {"id": "dpw15qz", "text": "Is it a ground lease or building lease?   I'm assuming if landlord is responsible for roof it is a building lease....  If it is a building lease does the tenant pay CAM?  Who has been doing general parking lot maintenance (like line striping or snow plowing)?    Typically a parking lot is the landlords responsibility, but if the tenant has to maintain it, a new lot could save them money in the long run so they might be willing to chip in.   Who insures the lot?  If it's the landlord you want to get it replaced before someone falls and sues you?", "replies": [], "depth": 1}, {"id": "dpw3y0u", "text": "It is entirely common for tenants to be responsible for major capex repairs and, if necessary during the term of the lease, to replace. In my opinion, you should have never paid for the re-sealing. You should absolutely before your rights to have them repave. If they really push back and it works to your benefit, you could consider extending the lease and amortise the costs over the extended term and add the cost to the rent. You really do need to review the full lease and any amendments. Did you buy the property leased or did you put the tenant in?", "replies": [], "depth": 1}, {"id": "dpw6dmb", "text": "If it's not completely black and white, I'd recommend getting a real estate lawyer to skim through your lease. They should be able to tell you within seconds. If you'd like me to look at any specific sections, feel free to shoot me a PM. I'm a commercial broker and spend a ton of time reading leases.", "replies": [], "depth": 1}, {"id": "dpw9are", "text": "The language is pretty clear that it's his responsibility. However, if he does a crappy fix and then threatens to leave when guys lease is up, will you fold?", "replies": [], "depth": 1}, {"id": "dpwm856", "text": "I would advise you consult a lawyer, nobody here has read the lease and can give you a proper answer ", "replies": [{"id": "dpwtzxt", "text": "Lol. Exactly.  Guy is looking for legal advice on reddit.  Don\u2019t be cheap. Hire a real estate attorney. ", "replies": [], "depth": 2}], "depth": 1}, {"id": "dpxc1i0", "text": "This is definitely a property management question, not a CRE question. It would all depend on your lease agreement with the tenant. Try posting to r/propertymanagement with the lease details, they should be able to help you properly! Good luck! ", "replies": [], "depth": 1}, {"id": "dpzitk3", "text": "2nd the notion that this is a Property Management question. With that respect, the lease terms will outline how to handle this situation. Specifically with respect to CAM expenses. Although it lists roof, water heat, and HVAC, as owner responsibility it doesn't list anything else. \n\nIn this situation you'd have to start by determining the type of lease agreement is it a modified gross lease or a triple net with stipulations. The lease form should outline how expenses should be handled. The lease should further outline capital and operations expenses, and most importantly expense pass throughs and/or additonal rents to the tenant.\n\nYou would really have to review the lease agreement to make any kind of determination and the lease agree will ultimately determine who's responsible for example, in a gross lease or full service lease (what you would typical find in a residential lease agreement) then owner would account for all operations expenses and base rent would have to be set accordingly to account for them.\n\nNow if it's a triple net, with stipulations, lease interpretation is going to be critical, because triple net assumes the tenant is responsible for everything with respect to operations, which is more common for a single tenant commercial property of this nature. In which case, the tenant would be responsible for all aspects of operations that aren't stipulated, and the only thing the landlord or owner would be responsible for is capital expenditures with respect to depreciation of the asset. \n\nTraditionally, repaving, resealing, concrete, and asphalt repairs are not typically treated as capital expenditures (because they don't add value to the asset nor are they subject to depreciation), their treated as necessary routine maintenance. Which in most cases under a triple net would fall under the tenants responsibility unless conditions or stipulations apply.\n\nLike I said you'd need to review the lease clauses.", "replies": [{"id": "dpzjmtc", "text": "Update: I just read further into the comments and yeah you have a triple net lease (lessee pays taxes, insurance, and all maintenance on top of base rent) with stipulations (owner pays to maintain HVAC, roof, and hot water heater).\n\nEverything outside of those stipulations is the tenants responsibility, and you shouldn't be paying for anything else other than those things.", "replies": [], "depth": 2}], "depth": 1}, {"id": "dq11kxz", "text": "Agreed.  It's tenant issue.  If they have limited term landlord contribution could be used to induce a renewal, but if they have term or are likely to renew anyway, then keep it on the tenant.", "replies": [], "depth": 1}]