Are Triple Net Lease Inspections Actually Needed? Absolutely!
A large percentage of the commercial NNN properties inspected are found to be in need of general repairs and normal or typical maintenance. In a Triple Net Lease (NNN lease), the property owners contractually obligate the tenant to perform all needed repairs and maintenance as as well as pay the property taxes and monthly lease amount. Many lease agreements also require owner approval and permission before changes can be made to both the interior and exterior portions of the structure. Performing an inspection at the time of purchase is always a good idea. The initial inspection will inform the buyer of any concerns are present in or around the structure at the time of the purchase, many of which may be negotiated during the purchase of the property. This inspection also serves as baseline for future quarterly inspections and when coupled with a Physical Needs Assessment acts as a guide for when systems may require replacement / maintenance.
What's the need for quarterly inspections? Quarterly inspections help to protect the assets of the owner. Quarterly inspections will show the owner, who may not present at the property on a regular basis, what has transpired since the last inspection. For example, we have performed quarterly inspections on a series of gas station / convenience stores in the Atlanta metro area. Most of the units have been well maintained. One however, has not. The reports with proper legal representation forced the tenant to perform repairs as required by the original Lease Agreement. This is the end has the potential to save the property owner thousands in both repair and legal costs should the tenant move before repairs had been made.
We perform commercial inspections on all types of properties that are used for many different purposes. For example, the type of structure most inspected by our firm is gas stations / convenience stores, followed by warehouses, and then by dental clinics and veterinary clinics.
The items and concerns found on both the initial and quarterly inspections far outweighs their very reasonable costs.