Commercial Tax for Artists Studio
My mother is an artist and rents a studio in a commercial building comprised of mostly other artists as well as some architects, writers etc. When she first started renting (1992) the real estate tax was only a few hundred dollars a year (in the lease stated as 1.5% of the total tax for the…
My mother is an artist and rents a studio in a commercial building comprised of mostly other artists as well as some architects, writers etc. When she first started renting (1992) the real estate tax was only a few hundred dollars a year (in the lease stated as 1.5% of the total tax for the building) It is now about $5000 and about 50% of her rent for the year. Does this seem legit? She is paying the same amount in tax as her next door neighbor who has a studio literally twice the size. I’m assuming both my mother’s lease and the neighbor’s lease stipulate 1.5% for each of them but shouldn’t tax be based on size of the studio or does that not matter if the lease has been signed? My mom spoke with the management company at one point (before she spoke with the neighbor) and was told by them that in fact it was calculated by size. And another thing, she signed her lease for a 2 year period (1992 – 1994) and never actually renewed it and has been renting without one ever since so not sure if what the lease actually says is relevant.
Does anyone have any insight as to how this all works? Thanks in advance, wasn’t sure if this was the correct forum to post but want sure where else to turn.
Commercial leases often have provisions for tenants to pay some percentage or all of the real estate taxes. Also, the fact that the lease expired in 94 doesn’t meant those terms became void when she became a month to month tenant. I’d go with jcarch’s advice to move if your mom isn’t happy with the arrangement.
It is typical of a commercial lease that the tenant will be paying a percentage of the real estate taxes, although it is enforced differently everywhere, and even within a building tenants may have very different terms.
I have space in a building similar to what you describe…our lease has a provision that any property tax increase on the building will be passed on to the tenants, in proportion to how much space you have. We don’t specifically pay for the current taxes, but in reality we do…it’s just part of the rent.
If your mother decides to relocate, there are tons of available spaces around 9th Street and 2nd Avenue. A number of old factory buildings were refurbished and split into studios right when the economy peaked, and there’s lots of spaces to choose from.
Thanks for the response. So its not common practice for the owners of a commercial building to make tenants pay for the tax? if a tax rate for them increases do they just up the rent to compensate?
The owners send my mom an invoice twice a year which they state is for 50% of the tax she owes. They say that they send her the invoice only after they get theirs (from the government?)so each year its different.
i guess i need to talk to a lwyer…
Sorry, something’s not clear to me.
Why is a non-owner paying the RE tax at all? If it’s in the lease that they do (weird but OK) then I suppose she’s liable under the terms of the lease until the lease runs out. Which it has. My guess (and guess is the right word) is that the owner has assigned a surcharge to cover their taxes based on some formula or other.
It may be legit. But might not be since you’re agreeing to a fee that’s as yet undisclosed and based on a formula that’s not entirely transparent. A RE lawyer would know that part.
But there’s always the option of going back to the manager and saying just what you’ve said here – “The formula’s out of whack. I’ve been a good tenant so cut me some slack bub.”
Good luck,