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Updated 14 days ago, 11/11/2024

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Matt Lewis
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Water Pipe Leak in Commercial Property- Understanding Who is Liable

Matt Lewis
Pro Member
Posted

I'm purchased my first commercial property this year and just had a water leak from a pipe going into the water heater in one of my tenant's space. The water leaked through a shared wall into their neighbor's space and repairs are being made. Both tenants are on modified gross and believe that they are not financially responsible for the repairs needed in their space because it was not their fault. Based off our lease agreement, my lawyer says that it is the responsibility of each tenant to repair their own space. The way it was explained to me is that I am responsible for maintaining the roof, exterior walls, concrete floor, parking lot, landscaping, etc. The tenants are responsible for anything that happens within their leased space regardless of the cause. 

My questions are: 1) Is this a common concept in commercial properties that the tenant is responsible to repair, maintain, and replace anything in their leased space regardless of the cause? 2) If so, how do I best explain that to my tenants? I completely understand their thought process and would question it as well if I was in their shoes.

Thanks in advance for your thoughts.

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