Legal Question in Business Law in California
Our lease holder for our commercial lease, has just given us a letter stating we owe a large sum of money. Which he wants paid in ten days. He claims this is the average of the last six months, beyond our triple net. Does he need to produce documentation that the amounts he claims to have paid were in fact paid? I believe the triple net amount we were charged were his estimate of what would be more than adequate to cover. I cannot believe he so grossly underestimated the amount. What recourse do I have?
2 Answers from Attorneys
I'd say a situation like this is somewhat unusual, but not impossible. My advice is:
A. Review your lease agreement carefully, looking for any and all language indicating what goes into the triple-net calculation, and when and how it is billed.
B. Ask the lessor for documentation. The lease probably permits this, and if it doesn't, I'd think a businesslike landlord or property manager would let you look at its costs and expenses anyway, or at least would give you an oral explanation. Whether there has really been a gross under-estimation, or there were unforseen and possibly unforseeable expenses, or maybe just your failure to anticipate some billable item, a good manager should be willing to provide you with some consultation, especially if they expect to be paid promptly and to keep the tenants happy.
C. Consider comparing notes with the other tenants who may be similarly impacted. Maybe another tenant can explain the charges in a way that'll make everything understandable, or maybe you'll get agreement that the landlord is wrong.
I agree with Mr. Whipple's answer. You may want to have an attorney review the lease language, and verify the appropriate procedure for a "true-up" of the lease charges.
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