Legal Question in Landlord & Tenant Law in Texas

Net Lease agteement

Three years ago, I entered into a ''Net Lease'' agreement when I purchased a business in Houston Texas. At that time, I did not understand what ''property taxes'' actually stood for in the document. The property taxes are outrageously high and equal between 2 to 2 1/2 months of regular rent payments. I became educated recently when my Landlord (residing in Philladelphia, PA) delivered a multi-thousand dollar tax bill and in similar terms said to pay up or get out. My business is Daycare and it isn't likely that my existing clients will follow if we relocate so we are forced to pay up; however, the terms of the contract indicate that I should pay the taxing authority rather than the Landlord.

My questions are few:

1) Shouldn't I pay the Landlord and the Landlord pay the taxes on the property and count that payment as rental income since it is described as additional rent in the contract ?

2) Is this a legal method of tax avoidance ?

3) What is the least costly method to end one of these contracts without living out its full term ?

4) Are there any parts of a ''Net Lease'' that are not legal or valid for property in Texas ?

I am looking to make a decision whether to reorganize or liquidate.


Asked on 12/04/03, 11:52 pm

1 Answer from Attorneys
Cheryl Rivera Smith The Smith Law Firm

Re: Net lease agreement

Unfortunately, the court will say that ignorance is no excuse. Try to work it out with your landlord since having a tenant may be important to him or her.

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Answered on 12/08/03, 4:46 pm


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