WHO PAYS FOR UTILITIES AND JANITORIAL IN A LEASE?
In the vast majority of leases, the tenant pays for utilities and janitorial services. The main question that is important to understand is whether the utilities and janitorial services are included in the full-service lease rate, NNN lease rate or if they are separately metered or contracted for and the tenant needs to pay them in addition to their monthly lease payment.
Again, the tenant is typically going to pay for them one way or the other, since they are to the benefit of the tenant. The defining factor is whether the rent already includes those two numbers or if it will be in addition to the monthly rent.
In most retail properties, the tenant is responsible to put the utilities in their own name and contract for janitorial services directly, since there can be a substantial variance in how much a tenant uses for utilities and / or what their janitorial expenses and requirements need to be. For example, a restaurant should use a substantially higher amount of utilities than a clothing store or typical office tenant. The same concept applies to janitorial needs. A restaurant or healthcare practice needs their spaces cleaned and sanitized at a much higher level and frequency compared to an industrial warehouse or traditional office tenant.
The same can be true for certain types of office buildings or industrial properties and the associated occupiers of those spaces.
For many types of multi-tenant office buildings, especially buildings that share common areas and HVAC systems, it can be more common to have the landlord contract for both utilities and janitorial expenses, and then include those expenses as part of the lease rate or through the operating expenses or NNN.
Either way, make sure you understand who is paying those bills and what is expected of you.