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Examination of Expenses
Passed Through to Commercial Tenants
Which Expenses are Not Passed Through
There are many landlord expenses associated with a
commercial real estate project that are not generally passed
through to tenants. Expenses that are generally not passed
through to the tenants include construction costs and expenses
for capital improvements to the project, financing costs incurred
by the project owner in the construction or acquisition of the
project, depreciation of the value of the project, commissions
for leasing space within the project to tenants, costs associated
with curing owner’s defaults or violations of leases, costs and
fees otherwise reimbursed such as expenses reimbursed by
insurance, and corporate expenses for the project owner.
Commercial leases should also dictate that if any expenses are
incurred due to the negligence or willful act of either the owner
or a tenant then the responsible party should be liable for such
expenses so that the tenant is not responsible for expenses
that result from the owner’s negligence or willful act and the
expenses associated with a tenant’s negligence or willful acts
are not passed onto all the other tenants, who were not
responsible for such expenses being incurred.
Return to Examination of Pass Through Expenses
Law Office of
Craig W. Little, P.A.