Assuming responsibility for a leased space is a significant milestone in the growth of a company. In most cases the lessee (tenant) assumes responsibility for net real estate taxes on the leased asset, net building insurance and net common area maintenance, hence the term Triple Net lease or (NNN). Maintenance, repairs, and equipment replacement may also be the lessee’s obligations which are not fixed costs and can result in unexpected expense. Understanding the condition of the leased space is crucial to a sound business decision. Also, the lessor of a commercial building may require documented evidence of the building’s current condition before leasing it out.
Scope of Pre/Post Lease Inspections
The inspection process included evaluation of all major components of the structure in order to establish existing conditions, remaining design life of mechanicals and any immediate and future repairs as needed. The inspection includes the evaluation of the following components:
- Exterior structure; material composition, condition, deferred maintenance
- Roof system; surface composition and condition, age and remaining useful life
- Building envelope; roof and sidewalls including windows and doors
- Heating, ventilation and air conditioning (HVAC)
- Electrical system and components
- Plumbing system and fixtures
- Interior finishes; ceilings, walls and floors
- Fire suppression and safety systems
- Hardscape and landscaping; parking lots, walkways and driveways
- Storm water drainage
Advantages of a pre-lease inspection for the Lessee include:
- Confirmation that components are functioning and suitable for intended use.
- Documenting the condition of the property and its components prior to occupancy could protect lessee from assuming liability associated with existing defects or premature failure of components.
- Understanding long-term maintenance requirements and related costs can be useful for budgeting purposes.
Advantages of a pre/post lease inspection for the lessor:
- Document baseline condition for the property before leasing which may help owners recover costs for damages incurred during occupancy.
- Inspections can help owners establish maintenance guidelines for tenants in NNN lease.
- A post-lease building inspection ensures that lessees fulfilled their obligations in maintaining and protecting the building and its components.
To schedule an inspection or any other questions, please feel free to contact us: Call 360-393-0274