New Brunswick Commercial Maintenance: Landlord Operations

Unlike residential landlord laws, which strictly demand the landlord maintain the unit regardless of lease language, commercial real estate in New Brunswick places the burden of maintenance exactly where the lease contract dictates.

The Role of the Triple Net (NNN) Lease

Most commercial properties—especially retail centers, industrial parks, and significant office spaces—utilize a Triple Net (NNN) lease structure.

In an NNN lease, the tenant is financially responsible for their proportional share of the building's maintenance. However, "financially responsible" does not always mean the tenant physically performs the work.

Typical NNN Maintenance Division

1. The Tenant: Generally responsible for maintaining, repairing, and replacing everything inside their demised premises. This includes interior walls, dropping ceilings, flooring, interior plumbing, electrical panels serving only their unit, and, critically, the HVAC units dedicated directly to their space.
2. The Landlord: Generally responsible for maintaining the fundamental structural integrity of the building (the roof, foundation, structural pillars, exterior walls) and all Common Area Maintenance (CAM) like parking lot repaving, snow removal, landscaping, and exterior lighting.

Note on CAM: While the landlord physically coordinates and pays the vendors for snow removal or roof patching, the landlord subsequently bills the cost of that maintenance back to the commercial tenants as "Additional Rent," proportionate to the square footage the tenant leases.

The "HVAC Conundrum"

Heating, Ventilation, and Air Conditioning (HVAC) systems are typically the most contentious, expensive maintenance item in commercial real estate.

In a standard New Brunswick NNN retail lease, the tenant must maintain the rooftop HVAC unit servicing their specific unit. The critical issue arises when the unit fails entirely.

• A lease might say the tenant is responsible for "maintenance and repairs." Does this mean the tenant must pay $15,000 to replace the unit if the compressor blows in the final year of their lease?
• Sophisticated tenants will negotiate an HVAC cap or demand the landlord pay for complete replacement, arguing the unit is a capital asset belonging to the building.

A well-drafted commercial lease explicitly separates the duty to perform routine maintenance from the financial liability to replace a dead unit.

Gross Leases

In certain commercial settings—like renting a single small office suite in a larger multi-tenant building—a Gross Lease is more common.

• Under a True Gross Lease, the tenant pays a single flat monthly rent.
• The landlord assumes all financial and physical responsibility for maintenance, property taxes, insurance, and utilities. The landlord bakes these projected costs into the higher flat rent price.

Addressing Structural vs. Cosmetic Repairs

Commercial leases must aggressively define the difference between structural elements (landlord duty) and non-structural elements (tenant duty).

If a severe storm damages the roof (structural), the landlord must execute the repair. However, if the roof leak damages the tenant's drop-ceiling and ruined their inventory, does the landlord have to replace the tenant's ceiling? Almost all commercial leases contain an indemnification and waiver of subrogation clause, stating that the tenant must rely on their own commercial property insurance to cover damage to their interior outfitting, even if the damage originated from a landlord structural failure.

Managing the End of Tenancy

Commercial landlords must aggressively enforce maintenance standards when a tenant vacates. A lease should include a robust "Surrender Clause" dictating exactly how the space must be returned.

• Must the tenant rip out the expensive networking cables they installed?
• Must they demolish interior partition walls, or does the landlord want to keep them for the next tenant?

Conducting a rigorous final inspection, comparing it to the initial move-in report, and billing the tenant's security deposit for failure to surrender the premises in "broom-clean condition" is vital to minimizing turnover costs.

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How Landager Helps

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