Page 8 - NBIZ Magazine February 2023

Those Assessments

of Charges

Found in Texas

NNN Leases

By Brian D. Womac

ffective as of September 1, 2001, Texas law listed in the lease. This also applies to the pass through of
requires commercial landlords to spell out any common area maintenance charges, taxes, and insurance
possible tenant assessment charges in the lease. costs whether or not the lease form is using a base year
Generally, all leases list the monthly rent owed for pass throughs or a triple net form passing through
Eby the tenant. With most commercial landlords the tenant’s proportionate share.
wanting to pass through the additional financial However, it is not enough to simply state that the
obligations of owning commercial properties, triple tenant is liable for these charges. Somewhere in your
net leases are being used in more situations. Typically lease document, the amount or method of calculation
found in retail leases, triple net lease forms pass through should be listed. Under the prior law, commercial
an assortment of charges, including common area landlords could rely on broad and sometimes vague
maintenance charges, taxes, and insurance costs. If a wording to hold tenants liable for these charges. Now,
landlord wants to pass through any charges other than commercial landlords must set out the amounts or
the base or minimum rent, the lease forms are required computation for the amounts.
to spell out exactly what is being passed through.
Most triple net leases list the estimated common area The Law
maintenance charges, taxes, and insurance costs to be Here is how it reads in the Texas Property Code:
charged. But is that enough? §93.012 Assessment of Charges
Texas law states that commercial landlords must
set out the tenant’s liability in the lease. Commercial (a) A landlord may not assess a charge, excluding a charge
leases require landlords to specifically set out any for rent or physical damage to the leased premises, to a
special charges by amount or method of computation tenant unless the amount of the charge or the method
before a tenant is liable for these charges. For example, by which the charge is to be computed is stated in the
if the tenant is liable for overtime heating and/or air- lease, an exhibit, or attachment to the lease.
conditioning, the amount or computation for the amount (b) This section does not affect a landlord's right to assess
must be listed in the lease. Likewise, if the tenant is liable a charge or obtain a remedy allowed under a statute
for parking, special cleaning services, or maintenance, or common law.
the amounts or computation for the amounts must be (c) (applies to the governmental entity)

8 NBIZ ■ February 2023