Who Pays for Repairs in a Commercial Lease? NNN vs. Gross Explained

The three structures side by side

How each structure allocates the three big costs:

• Gross (full service): landlord pays taxes, insurance, maintenance; tenant pays one rent
• Modified gross: tenant pays base rent plus some expenses — often utilities and janitorial, sometimes a tax or insurance share
• Triple net (NNN): tenant pays base rent plus its pro-rata share of taxes, insurance, and CAM

What CAM actually covers

Common area maintenance charges in Las Vegas retail and office properties typically include landscaping, parking lot sweeping and resealing, lighting, security, management fees, and repairs to shared areas. The definition of CAM is negotiable — and it is where disputes live. Watch for capital expenditures (a new roof) being passed through as CAM, and negotiate caps, exclusions, and audit rights.

Who fixes the HVAC?

In many Nevada NNN leases, the tenant is responsible for HVAC maintenance and sometimes replacement — a five-figure surprise for a tenant who assumed otherwise. Gross leases usually put HVAC on the landlord. Whatever the structure, the repair clause controls, and it should say exactly who maintains, who repairs, who replaces, and who pays.

The reconciliation trap

NNN tenants pay estimated CAM monthly, then trued up against actuals once a year. Without protections, that reconciliation can arrive as a large unexpected bill. Protect yourself with: a cap on controllable CAM increases, the right to audit the landlord's books, a deadline for the landlord to deliver reconciliations, and clear exclusions (capital items, leasing commissions, the landlord's income taxes).

Comparing spaces honestly

A $2.00/SF gross lease and a $1.40/SF NNN lease with $0.70 in pass-throughs cost about the same — but the NNN tenant carries the risk that taxes, insurance, and CAM rise. When comparing Las Vegas spaces, ask every landlord for the current full pass-through numbers and the last two years of reconciliations, then compare total annual occupancy cost.

Negotiation points that matter

Whether gross or NNN, these terms move real money:

• CAM caps (typically 3–5% annual caps on controllable expenses)
• Gross-up clauses for partially occupied buildings
• Exclusions for capital expenditures, or amortization of them
• Audit rights with a defined window
• Clear HVAC and roof responsibility language