USA - ALABAMA Law and Practice Contributed by: Adam J. Sigman, Crystal H. Walls, Nathan Stotser and Katie Sinclair, Dentons
Tenants may pay the first month’s rent, a security deposit, broker’s fees, or other landlord admin - istrative fees at the start of a lease. 6.9 Payment of Maintenance and Repair Net commercial leases often pass operating expenses (including common area maintenance and repair) through to the tenant, in accordance with the lease’s terms, typically prorated among the tenants of a specific property based on the amount of square footage leased by each ten - ant at said property. Gross commercial leases typically require the landlord to pay for common area maintenance and repair, though these costs are also typically priced into the rent paid by the tenant. For a residential lease, the landlord is required to “keep all common areas of the premises in a clean and safe condition”, along with other requirements for the leased premises’ working order and condition (Section 35-9A-204). 6.10 Payment of Utilities and Telecommunications Net commercial leases often include utilities and telecommunications services serving an entire property (not just an individual tenant) in the operating expenses that are charged to tenants on a pro rata basis, while gross com - mercial leases may include the costs of such services, utilities, and telecommunications in the rent charged to the tenant. If such utilities or services are separately metered and service only a single tenant’s leased premises, that tenant is often responsible for the payment for such utili - ties or services. 6.11 Insurance Issues Payment of insurance premiums insuring leased real estate is typically done by a landlord, but such costs are often passed through to tenants
as an operating expense in net commercial leas - es. Insurance coverages vary by property, but many commercial landlords carry general liabil - ity, casualty, flood, and fire insurance, as well as coverage for bodily injury, property damage, lost rents, etc. 6.12 Restrictions on the Use of Real Estate Landlords may limit the way commercial tenants use leased real estate and often prohibit tenants from using the leased premises for certain exclu - sive uses negotiated with other parties. Applica - ble zoning laws and private restrictive covenants in the property’s chain of title may impose further restrictions on tenant uses. 6.13 Tenant’s Ability to Alter and Improve Real Estate The terms of a lease will dictate whether a ten - ant is permitted to alter or add improvements. Often, tenants may receive a tenant improve - ment allowance to induce signing the lease, requiring that a landlord either installs certain improvements on the premises or reimburses the tenant for its costs. Often, a lease requires a tenant to obtain the landlord’s written approval for materials, plans, contractors, etc, involved in such improvements before starting the construction or installation of such improvements. Furthermore, trade fixtures may generally be removed by a tenant, though the tenant may be held liable if they damage the underlying real property in the process of remov - al. See LaFarge Bldg Materials, Inc v Stribling, 880 So 2d 415, 419 and 424 (Alabama 2003). 6.14 Specific Regulations The Alabama Uniform Residential Landlord Ten - ant Act (Section 35-9A-101 et seq) governs any rental agreement (“all agreements, written or
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