Ask the Experts: Commercial Lease FAQs

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Q: In the lease for my new space, it says I'm responsible for all repairs and replacements, including heating, venting and air-conditioning. Is this typical of a commercial lease?


A: It's important to review your lease thoroughly and seek professional guidance from an attorney and/or real estate specialist. (At our facility, we are responsible for the repairs and maintenance you've indicated.) We reached out to Dale Willerton, professional lease consultant for commercial tenants, for his advice. He explained that tenants who have gross leases tend to pay one all-inclusive monthly rent, with the landlord responsible for HVAC repairs. If you have an NNN lease, however (also known as a triple net lease), you're typically responsible for the maintenance, repair and replacement of HVAC systems.

Most leases, Willerton says, are the second type: triple net. Gross leases are much less common. Your new landlord may offer to handle all HVAC maintenance for you and recoup the cost in common area maintenance (CAM) fees or operating costs. This is the industry norm, but it's negotiable.

Keep in mind that a properly maintained HVAC system has a life span of about 20 years. So if you're signing a five-year lease on a space where the HVAC is 18 years old, you might find yourself having to replace it midterm. And if you leave that space after your five years are up, you've basically gifted your landlord a brand-new HVAC. Willerton recommends you spend a few hundred dollars on an HVAC inspection before you sign a lease—the same way you would have a used car inspected before you bought it.

Kathy Blake is the owner of Kathy Blake Dance Studios in Amherst, New Hampshire. She and Suzanne Blake Gerety are the co-founders of DanceStudioOwner.com.

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