Legal Question in Real Estate Law in California
I have a commerical lease with triple net (Building A).
There is another building next to us separated by a parking lot (Building B)from the same owner and the 2 buildings do share some common areas like the parking lot and trash bins.
My questions is about the utility bill. The Electric bill has 2 buildings listed separately with its own meter. However, the two bills are shared by all tenants from the two buildings. Is that legal? Of course, the Building B's utility is a lot higher and I am getting pretty tired of paying for it. The lease just states
"Lesee agrees to pay for all utilities furnished the demised premises regardless of kind or nature. Whereas more than one lessee is metered from common meters, the cost of utilities shall be pro-rated and billed monthly according to the number of square feet leased by Lessee"
Can someone help me please? Couldn't I argue that my building meter is only what I am responsible for?
Thank you!
1 Answer from Attorneys
I'd start by looking to see how the "common area" is defined in the lease. If it includes all the common areas of both buildings, I'd say you are stuck with the lkandlord's formula and policy, at least until lease-renewal time comes around.
I assume each tenant has a separate meter and pays its own electricity for its private, non-common area, in addition to sharing the common-area bill for both buildings.
The lease language you quote is rather brief and rather vague as commercial triple-net leases go, and I wonder if there isn't more pertinent language elsewhere in the lease.
I also suggest talking to some other tenants about their interpretation of the leases, especially tenants in the other building. Further, it might be helpful and appropriate to discuss your question with the landlord's representative.
Finally, I'd like to point out that a lot of my tenant clients have expressed views that can be summarized as "my lease isn't fair." Sometimes the best way to get a "fair" lease is to negotiate it through an experienced lessee's agent when the market is soft. Right not is not the best of times, but in a couple of years your deal may look like a real bargain.