Legal Question in Real Estate Law in Oregon
Is it legal for a leasing tenant to pay property tax?
My father plans to lease a house for at least 5 years and turn it into a nursing home. I read the papers for leasing it and I don't know if it's right for the tenant to pay for property tax. the house is at least 300,000 so I'm guessing it's going 6k a year. The landlord also wants us to pay for insurance for the house, not renter's insurance, is that legal too?
1 Answer from Attorneys
Re: Is it legal for a leasing tenant to pay property tax?
When leasing a property for business purposes, pretty much everything is negotiable. Whether the total amount the landlord is asking in rental and other payments is appropriate then becomes a business decision for the tenant.
It would appear that the landlord is asking for what is typically called a net lease (tenant is responsible for paying everything except the mortgage on the property).
When entering into a lease of this type it is usually a good idea to have an attorney review it for you. This is a significant investment for your father. Further, since he plans to use this property as an adult care facility, he should be certain that his use of the property will not be disturbed.
There are often clauses put into leases by tenant's attorneys that help protect a tenant in a net lease. Such clauses include allowing the tenant to challenge the amount of the taxes or the taxing authority's valuation of the property.
My office represents commercial tenants on a regular basis and would be happy to discuss this in more detail with your father.