Can a multi-tenant Landlord pass commissions paid thru to NNN operating expenses paid by tenants?

Landlord pays $5k in commissions to secure a tenant. Can that expense be passed thru to all tenants in the shopping center as an operating expense (NNN) or is it a Landlord expense?
In Property Management - Asked by Jeff N. - Sep 13, 2011
Report Abuse
Answer this Question

Answer(s)

Kenneth F.
Developer
Dedham, MA

The industry standard in the northeast is no leasing commission pass throughs to the tenants. In reality, the answer to your question lies within your lease. I have seen many national tenant leases that are clear on that exact matter and define exactly what can be and can't be included in CAM.

Sep 13, 2011
Report Abuse
Bruce K.
Corporate Investor
Riverside, CA

It's like everything else in life - it's negotiable.... If it is in the lease, then "yes" he can. Double-check your lease to see exactly what common area charges can be passed through.

Sep 13, 2011
Report Abuse
Chris R.
Broker/Agent
Denton, TX

Typically leasing commissions are not part of NNN expenses but it would be up to the terms of each specific lease agreement to determine what constitutes the charges that can be passed through on a NNN lease.

Sep 20, 2011
Report Abuse
Leonard C.
Broker/Agent
Jacksonville, FL

In many cases the mortgage company applies (escrows) a small percentage of monthly payment to future commission payments. Lease Agreement should stipulate what expenses are included and excluded in the pass-throughs. Tenant should request an annual reconciliation of all the pass through expenses to ensure they are not being over charged.

Sep 21, 2011
Report Abuse
Susan K. B.
Property/Asset Manager
Frisco, CO

In my property Leasing Commissions are not a pass through to the Tenant. It is a non recoverable expense in other words. LL pays it exclusively. Cant speak for other properties and all states. Im in Colorado.

Jul 11, 2013
Report Abuse

Welcome to Answers

LoopNet Answers is where the commercial real estate community shares what they know to help each other out. And it's all for free.

Ask a question to get advice from brokers, investors, professionals and local experts.

Answer questions to raise your visibility as a trusted advisor and build new relationships.

Ask a Question

Post Question