Taking Charge

Landlords and property owners of commercial and industrial property often underestimate the importance of analyzing their property tax assessments for leased buildings. The rationale for skipping this review is simple. The property taxes are paid by tenants through a triple net lease, so the landlord puts the onus on the tenants to appeal if they believe the taxes are high. On the surface, there doesn't appear to be any benefit to the owner taking on the responsibility. However, this choice may have unintended legal and financial consequences for property owners. The most direct way to deal with these issues is to make it clear in the lease who has the right to appeal property taxes and to control decisions in an appeal. When these issues are raised in courts, judges often consider several factors in balancing the rights of the parties.