Legal Question in Real Estate Law in California
Documentation of Triple-Net Increase
Commercial lessor notified us of increase in triple-net portion of our rent, without documentation of actual increase in costs.
1- May we insist that she document actual basis for triple net, or is she entitled to manufacture whatever number she chooses?
2- If we may demand documentation, should we pay the requested amount pending such [if so, for how long?] to avoid a default (labeled ''paid under protest'')?
(This was actually part of prior litigation, but both attorneys screwed up so badly that this was one of many issues not settled.)
4 Answers from Attorneys
Re: Documentation of Triple-Net Increase
Yes, you may insist upon documentation. Send you demand with a letter advising you are paying under protest until the increase is documented. If no document is forthcoming you will deduct the paid increase from the following month's rent. Be polite but firm.
Re: Documentation of Triple-Net Increase
You have a right to obtain documentation. Contact this firm for free consultation.
Re: Documentation of Triple-Net Increase
These should be documented, and the lease probably has language requiring the documentation. As a commercial landlord myself, I usually don't include the receipts in the bill, but make them available for inspection by the tenants, because they obviously want to make sure they're paying reasonable and legitimate expenses.
The safest course would be to pay the amount demanded under protest, and insist on documentation--a letter to the landlord from an attorney with specific references to applicable portions in the lease and California law would probably be effective.
Re: Documentation of Triple-Net Increase
Any well-written commercial or industrial triple-net lease should contain language requiring exchange and/or inspection of documents. If such a term does not exist, it will be implied by a court in interpreting the lease.
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