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r/CommercialRealEstate
37
Posted by2 months ago

Homeless person broke glass at my NNN leased building in Major city

My tenants called me to let me know that a homeless person broke their front windows overnight. We filed a police report and I asked them to file an insurance claim. They are all supposed to have insurance but 2/3 of the tenants do not. My question is am I on the hook for the windows? I thought since it’s a NNN Only thing I’d be on the hook for is roof. Please let me know thanks

41 comments
93% Upvoted
level 1

The lease is NNN yet 2/3 of them don’t have insurance? Sounds like you could be on the hook for not making sure they had policies in place, but the lease most likely says it’s on them since that isn’t structural etc.

76
level 2

No doubt the tenant should have insurance, but I don't see how them not having insurance has any bearing on whether or not it's on the tenant. Which it probably is.

19
level 2
Op · 2 mo. ago

I will review the lease and double check. Can I fix it and send my tenants a bill for it afterwards?

11
level 1

Most NNN leases I’ve seen tenants are responsible for glass breakage. Premises can be secured with s sheet of plywood temporarily if you have a maintenance person.

I wouldn’t call glass company as tenant may say it is landlord’s expense cause you called them. So yes, read your lease.

23
level 2
Op · 2 mo. ago

Okay I got my Maintaince guy to cover with plywood. Now just held up because I don’t think I’m the one supposed to be paying for it. Thanks

5
level 1

How do you come here and expect any of us to know? READ YOUR LEASE. If language is silent, try to go half and half on replacement.

21
level 1

Depends what your lease says for LL and tenant responsibilities as well as reimbursements. It is usually written in the lease if you have a large tenant and the lease was written well

7
level 2
Op · 2 mo. ago

3/5 tenants I inherited through the previous owner. The 2/5 tenants that I put in, with my leases, they are on the hook for it. Just the 3 tenants that I inherited I am not familiar with the lease so I will reread it this afternoon. If the lease doesn’t mention it, what does it mean?

4
level 1
· 2 mo. ago
Property Managment

I work strictly with NNN leases. Most NNN Leases have language where this type of repair falls under tenants duty to maintain.

Going forward, you should make sure each tenant is insured. This requirement for the tenant also protects you in a way. They won’t break the bank and go under for issues like this. As large glass windows can be $10k.

3
level 1
· 2 mo. ago · edited 2 mo. ago

I’m in Massachusetts. The liability and general insurance outlined in our leases are the type you obtain only with a business insurance policy.

It’s illegal to conduct business in Massachusetts without an active business policy. Our leases include the tenant must provide a Certificate of Insurance annually upon renewal or establishment of a new policy, i police those. They have 30 days past expiration, and I tell them at day 14 I will have to issue a eviction default on day 30 to protect us, then I send a notice they are in default of their lease .

You are likely liable as the landlord if they do not have insurance for anything that goes on inside your space otherwise (while the Cert of Insurance should list you as Additionally Insured, this process should be outlined in the insurance clause in the NNN agreement)

So if they are bar for example and they over serve someone who kills someone in a DUI, but doesn’t have insurance, they will sue you in Massachusetts for liability since you didn’t enforce the Clause that ensures a tenant is carrying the proper certifications and insurance to operate in your building. You let them over serve otherwise and operate illegally.

The lease should also outline what you are and are not responsible for. I had some teenage kids break the showroom windows at a tenants space that was NNN in 2020. The lease outlined we were responsible for the roof, the exterior walls and the foundation and it outlined that the tenant maintained/replaced everything else in the space including hvac and windows.

My ownership team stood thier ground and did not replace the windows. If your tenants are responsible, they should replace the windows within 14 days.

If they don’t have insurance, they should use thier own reserves, and you should issue a lease violation on the lack of insurance. If they don’t replace you can issue another lease violation and build an eviction case (if they don’t have insurance and don’t take care of the space… (and bill back in CAMS at the end of the year) they aren’t as good of tenants as you think… someone will do that and pay on time) and replace yourself and invoice the tenant.

Good luck

2
level 1

Consult an attorney and next time make sure tenants provide you with proof of insurance

2
level 1
· 2 mo. ago
Broker

I literally had two guys draft a purchase contract on one page on a notepad and sign one time. I also had a contract over 85 pages long that covered EVERYTHING. The point being, your contract/lease with them could say anything. You need to refer to it. If you aren’t savvy with interpreting one, reach out to your lawyer. Depending on your relationship with your broker, they may look at it and give their opinion for free, but most of us are not lawyers!

2
level 2
Op · 2 mo. ago

Thank you I reviewed the leases that I inherited them under and it says they’re responsible.

1
level 1

Before signing a lease, ask for proof of insurance.

2
level 1

Are you sure you know what NNN means?

1
level 2

I don’t think he does. He said he’s responsible for roof. That alone makes it not a NNN lease.

0
level 1

I have had glass broken on my unit 7 times in the last 2 years. My insurance as a tenant covers it. The tenant should have insurance, if he does not- I would assume he covers it out of pocket. It is $3500 for a 4x4 replacement here in Ontario.

1
level 1

Definitely make them fix it with an inspection if they are responsible, but get proof of insurance asap - requiring insurance should absolutely be in the NNN lease.

1
level 1

that's a tenants problem unless your lease was written by an idiot.

1

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