Net Tenant in Brooklyn Pays $80k in Rent After a Real Estate Tax Escalation and Water Charges Notice — The Myth of the Troublesome Net Lessee
April 19, 2015
This happens a lot. A client comes to us and thinks they have a pernicious tenant on their hands, a tough cookie tenant that will put up a fight when challenged. In this case, it was a mature woman from Connecticut who was managing a net leased Brooklyn asset from afar. She and her corporate counsel were concerned that the net tenant, who had fallen behind, was planning some type of coup with all his sub-tenant stores. The net tenant was also allegedly well-connect in local political circles.
Whatever the landlord may have thought, the net tenant owed the rent.
Unfortunately, however, the first thing we noticed when we looked at the case was that the real estate tax escalations and water bills had not been properly billed as per the lease. The property wasn’t being managed by a management company, and the landlord had been sending the rent bills herself. Therefore, our first step was to draft and send a proper rent bill for real estate tax escalations and water charges, including back up. Then we served it carefully, in accordance with the lease. We also sent a copy to every sub-tenant of the net tenant, so they would know that a significant amount was due on the over-lease and that their sub-tenancies could be in jeopardy.
That’s all it took. The net tenant paid in full and immediately. The myth of this tenant’s thirst for a fight was way bigger than the reality. The moral of the story is simply this – seek and ye shall find…the rent!
