[RPPTL LandTen] Question on Capital Expenses

Fri Sep 16 12:27:36 PDT 2016

Thanks Art. 

Scott A. Frank

Attorney at Law

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From: landten-bounces at lists.flabarrpptl.org
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Arthur J. Menor
Sent: Friday, September 16, 2016 3:17 PM
To: RPPTL Landlord Tenant Committee <landten at lists.flabarrpptl.org>
Subject: Re: [RPPTL LandTen] Question on Capital Expenses

Scott, I am not sure if there is an answer to your question under Florida
law but see the attachment for a discussion of a Tennessee case.

Arthur J. Menor
Partner, Board Certified in Real Estate Law 

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From: landten-bounces at lists.flabarrpptl.org
<mailto:landten-bounces at lists.flabarrpptl.org>
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Scott Frank
Sent: Friday, September 16, 2016 8:24 AM
To: RPPTL Landlord Tenant Committee
Subject: Re: [RPPTL LandTen] Question on Capital Expenses

Thanks for the answers so far. Please note that this is not a lease drafting
question. My standard lease forms already account for this. 

I am just debating with my client over an existing lease at a property they
are buying. My position is that if its not excluded its included (although
gaap seems to indicate that the costs need to be amortized over useful
life), but they insist that the capital expenses are excluded if they are
not explicitly included. So I wanted to get your take to see how far off I
am. 

Thanks. 

Sent from my iPhone

On Sep 16, 2016, at 8:12 AM, David Weisman <David.Weisman at gmlaw.com
<mailto:David.Weisman at gmlaw.com> > wrote:

I have often seen CAM including the annual expense of the capital
improvement amortized over its useful life based upon a straight line
depreciation schedule. 

Another concept is to exclude them, except for amortized portion of capital
improvements installed for the purpose of reducing or controlling Operating
Expenses or complying with applicable Laws.

David  Weisman

Board Certified Real Estate Lawyer

Greenspoon Marder, P.A.

200 E. Broward Blvd., Suite 1800

Fort Lauderdale, FL 33301    

Phone 954-491-1120 Ext. 1015

Direct Phone 954-343-6941

 <mailto:David.Weisman at gmlaw.com> David.Weisman at gmlaw.com

 <http://www.gmlaw.com/> www.GMlaw.com

<image002.jpg>

From: landten-bounces at lists.flabarrpptl.org
<mailto:landten-bounces at lists.flabarrpptl.org>
[mailto:landten-bounces at lists.flabarrpptl.org] On Behalf Of Law Offices of
Scott A. Frank P.A
Sent: Thursday, September 15, 2016 11:03 PM
To: 'RPPTL Landlord Tenant Committee'
Subject: [RPPTL LandTen] Question on Capital Expenses

All:

I am presently having a debate with a  client regarding capital
repairs/replacements/improvements in a NNN lease for an office building.
The lease lists CAM components, with standard "includes but is not limited
to . . .".  But the list neither includes nor excludes capital expenses
explicitly.

So do you think the Landlord can pass these expenses through?  And does your
opinion differ if the expense relates to a capital replacement/repair versus
a capital improvement?

As always, thank you for your input.

Scott A. Frank

Attorney at Law

LAW OFFICES OF SCOTT A. FRANK, P.A.

5301 N. Federal Highway, Suite 170

Boca Raton, FL 33487

p:  (561) 826-5400

f:  (561) 423-5721 

 <mailto:sfrank at saflaw.com> sfrank at saflaw.com

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