Make Tenants Pay Tax on Their 'Overstandard' Improvements

Standard commercial net leases require the tenants to pay a pro-rata share of property taxes on an office building or shopping center based on how much of the space each occupies. As a result, when improvements cause the property’s tax assessment to go up, the big tenants pay the lion’s share of the tax increase. As long as the big tenants actually benefit from the improvement—whether to their own space or the common areas—it’s reasonable and fair for them to pay more than their smaller neighbors.