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Who spends for roofing system repairs in business leases?Is our rain


Who spends for roofing system repairs in business leases?Is our rain

over with for the season? My guess is we'll see another soaking in May, and then perhaps during the monsoonal desert period in July and August.

But what a wet one we experienced this year! The drawback of so much wetness is owners throughout the region heard the cumulative screams of aid from their residents as relatively water-tight roofing membranes start to leakage.

One of the most common concerns we are asked by occupants of industrial/commercial real estate is, "Who is accountable for the roofing system?" So, if you're renting a new space or dealing with an existing one, this column ought to serve as a guide.

Let's dig in, shall we?


Before the water comes pouring into your office or warehouse from any future downpour, do yourself a favor and grab a copy of your lease (if you have one) and have a look at a number of locations.

Look at the heading throughout the top of the very first page. There you must discover a recommendation to "net" or "gross". This is an important distinction, as the main difference between the 2 leases is the duty for the roofing system.

The huge bulk of leases in Southern California utilize the AIR CRE form and read something like this ……" AIR Commercial Real Estate Association Standard Industrial/Commercial Single-Tenant Lease-- Net."

Usually, in a gross lease, the owner is responsible for the roofing system and in a net lease, the resident is responsible. There are some specifics, nevertheless, that need to be understood.

Next, take a look at the paragraph that begins with "maintenance and repairs." In the AIR leases, it's paragraph 7 on pages 5 and 6.

Obligation for the roofing system on an industrial/commercial building is burglarized 3 categories: repair work, replacement and upkeep. You need to read how your particular lease deals with each item.

Upkeep


The majority of leases (and absolutely the AIR kinds) specify which celebration calls and maintains the roof for the maintainer to have a service agreement for the upkeep.

Many maintenance contracts include an annual check out for eliminating debris from the roof and making sure the downspouts are clear. In some cases roof leakages happen when ponding builds at the downspouts due to the fact that they are obstructed. The puddle sits at the low point of the roofing, deteriorates the membrane and leaks take place.

Another perpetrator is the area around roofing system penetrations (such as HVAC units) that are not properly sealed. When the bonding representative understood as mastic becomes dry and cracked, the product loses its versatility and water can permeate through.
Once once again, a lot of leases outline which celebration is on the hook to repair a roofing if repairs are needed.

When it comes to a gross lease, the owner carries out the repairs and in a net lease, the repairs are the occupants' duty to perform other than when the repairs exceed 50% of the cost to replace the roofing system.

Replacement


In a gross lease, the owner is responsible for changing the roofing system at her sole expense and expense. In the case of a net lease, the owner is also accountable but only when repairs go beyond 50% of the cost to change. Within the AIR language, the owner replaces the roofing system, at her expense, and after that amortizes the cost over 12 years.

So, when it comes to a gross lease, blow up your owner's phone. In a net lease, the help is all on you. Call a roofing contractor!

Allen C. Buchanan, SIOR, is a principal with Lee & & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.

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Elwood Hill
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Elwood Hill

Elwood Hill is an award-winning journalist with more than 18 years' of experience in the industry. Throughout his career, John has worked on a variety of different stories and assignments including national politics, local sports, and international business news. Elwood graduated from Northwestern University with a degree in journalism and immediately began working for Breaking Now News as lead journalist.

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