1031 Nnn Properties

Written by Linda Alexander
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Whether you are performing a 1031 exchange for a triple net lease property, or you are negotiating any lease as a landlord or tenant, it is important to spell out all of the details. Your lease proposal is one of the most important documents for doing this. Both landlord and tenant benefit from a well-planned lease agreement. The proposal is the place to do it.

Writing a Lease Proposal

Using a lease proposal lowers the number of potential miscommunications between the two parties, and may eliminate them altogether. Further, it is a starting place for negotiations. It specifies all of the fine points that your lease will include, such as square footage, rent, and responsibilities of both parties.

Commercial leases entail more than standard residential leases do. Therefore it is important to decide ahead of time whether the landlord or tenant is responsible for certain items and duties, and to put it in writing. Things like roofs, foundations, and exterior walls, gutters, and parking lots should be discussed. You should know who will pay for real estate taxes, property management fees, real estate brokerage commissions, and building improvement costs.

Other things to decide on include liability insurance, interior maintenance, water and sewage services, gas, electricity, and HVAC maintenance. If the building includes landscaping, identify who will maintain it and who is responsible for the costs associated with landscape maintenance. It is also important to spell out the exact use of the building that is intended and permitted, to avoid any confusion.

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