add taxes to monthly rent in a net retail lease?

With a small retail lease a quarterly bill for property tax can be troublesome to collect and problematic for a small shop to pay.
Is there any reason, legal or otherwise, why the tax portion can't be amortized over 12 months and incorporated into the monthly rent. Effectively creating a gross lease but allowing for the flexibility of increasing the monthly rent when the taxes increase?
any other thoughts or suggestions would be appreciated.
thanks in advance
In Leasing Property - Asked by Jeff M. - Aug 22, 2011
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Answer(s)

Nancy G.
Broker/Agent
Rochester, NY

I know a Landlord who meets different tenant needs' by writing leasing helping each tenant. So, if you want to add in the taxes vs charge taxes as part of the Common Area Maintenance you can in retail. Let me know if I can help you further. Do you need an agent?
Investopedia Defines Modified Gross Lease as:
What Does Modified Gross Lease Mean?
A type of real estate rental agreement where the tenant pays base rent at the inception of the lease but in subsequent years pays the base plus a proportional share of some of the other costs associated with the property, such as property taxes, utilities, insurance and maintenance. For example, tenants of a property are required to pay their portion of the total heating expense of an office tower.
Read more: http://www.investopedia.com/terms/m/modified-gross-lease.asp#ixzz1Vmu5Jyxd

Aug 22, 2011
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Jeff M.
Researcher
Chester, NJ

thanks Nancy!

Aug 23, 2011
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Kathy S.
Broker/Agent
Petaluma, CA

No reason not to amortize the taxes over the year. However, if your intent is to show a base rent plus taxes, I would spell that out in the lease. The base rent would be subject to annual (or negotiated) escalations but the taxes would be paid as reimbursement, based on the actual bill. Otherwise, roll everything into a base rent and that full amount is subject to the annual (or other time frame) increase.

Aug 23, 2011
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Jeff M.
Researcher
Chester, NJ

any good resources that would have a variety of lease forms for small commercial properties?
thanks again,

Aug 23, 2011
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Chris R.
Broker/Agent
Denton, TX

Excellent way to do it - as long as the lease permits it - and/or add such language to the lease or modify an existing lease to permit monthly collection of taxes.

Aug 27, 2011
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