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Loren
Loren, Lawyer
Category: Landlord-Tenant
Satisfied Customers: 32590
Experience:  Attorney with 30 years of experience representing landlords and tenants.
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I signed a 3 year lease with an additional option to extend

Customer Question

I signed a 3 year lease with an additional option to extend an additional 3 year lease.
I signed the lease on May 15th, 2014, and the lease expires on May 15th, 2017.
My lease reads: year 1 and 2, the base rent includes the additional NNN charges in the payment of $4,000.00 per month.
Year 3 the base rent will increase to $4,500.00 per month including the NNN charges.
This lease is subject to the provisions contained in the declaration of construction and operation, covenants, conditions, and restrictions and grant of easements pertaining to 140 hidden valley parkway, and all other parcels comprising the shopping center.
I have not paid, or been asked to pay CAM fees prior to receiving this letter. On Jan 6th, 2016 I received a letter that stated:
in accordance with your lease for the above referenced premises we have completed the 2016 budget for the property.
Please note that your 2016 monthly CAM estimate will be $2,238.00 per month.
Please submit the new monthly CAM payment starting January 1st, 2016.
My question is can they start charging me on January 1st, even though my 2 years mark isn't until may 15th 2016? also, shouldn't my CAM fees be included in my total rent based on the wording of my lease? why are they able to start charging me now , and they didnt charge me the cam fees in 2014, and 2015?
Submitted: 1 year ago.
Category: Landlord-Tenant
Expert:  Loren replied 1 year ago.

Good evening. I am Loren, a licensed attorney, and I look forward to assisting you.

Customer: replied 1 year ago.
Thanks Loren for your help.
Expert:  Loren replied 1 year ago.

Does the lease provide for estimated NNN charges based upon the prior year and then a reconciliation in the beginning of the next year?

Customer: replied 1 year ago.
I'm not sure, do you know where I could look for this information? I have my lease in front of me.
Customer: replied 1 year ago.
My lease reads it includes NNN charges in my base rent. Year 1 and 2 is 4000.00 per month, year 3 is 4,500.00 per month including NNN charges.
Expert:  Loren replied 1 year ago.

Look for a section regarding payment of additional rent.

Expert:  Loren replied 1 year ago.

Is the NNN monthly payment defined as an estimated payment?

Expert:  Loren replied 1 year ago.

That is typically how it is done since the NNN charges are based upon actual payments by the LL and are not known until they are reconciled after the end of the year.

Customer: replied 1 year ago.
it says common area operation expenses included for the period years 1 and 2. Can I have them start the CAM fees in May when period year 2 is complete?
Expert:  Loren replied 1 year ago.

You can ask, but the NNN charges are based on actual expenses and reconciled on an actual year basis.

Customer: replied 1 year ago.
Ok, so why wouldn't they charge me CAM fees in 2015?
Expert:  Loren replied 1 year ago.

I do not know. It is not done that way. They may not know what they are doing or how to manage a triple net lease. In any even they can only charge what the lease says.

Expert:  Loren replied 1 year ago.

Did you have further questions? Have I answered your question?

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