Contributed By Allen Matkins Leck Gamble Mallory & Natsis LLP
Telecommunications costs are typically paid directly by the tenant. Subject to reimbursement by the tenants, the landlord will typically pay utilities unless the tenant’s premise is separately metered, but this can be prohibitively expensive. If a tenant is leasing an entire building, it will typically contract directly with the utility supplier.
In retail properties, each tenant has a separate account, and the landlord pays for utilities and services for the common areas. In office buildings, the landlord pays these costs, subject to reimbursement by the tenants, typically based on their square footage. Water, sewer and garbage fees are paid by the landlord and subject to reimbursement via rent, on an equitable or proportionate basis.