USA - SOUTH CAROLINA Law and Practice Contributed by: Matt Norton and Christian Kolic, K&L Gates
in the gross income of the owner for general income tax purposes. 6.8 Costs Payable by a Tenant at the Start of a Lease Tenants typically pay a security deposit equal to one or more months’ rent at the inception of the lease. Alternatively, the landlord may require a letter of credit to serve as a security deposit. Tenants are also generally required to pay the first month’s rent upon signing the lease. 6.9 Payment of Maintenance and Repair Where there are multiple tenants in a property, the cost of maintenance and repair of the com - mon areas (CAM charges) is divided among the tenants. Generally, each lease will specify a fixed, specified proportionate share of the CAM In most cases, utilities are directly metered to the separate tenant spaces and paid for by the ten - ant. Otherwise, where there are multiple tenants, each tenant is typically charged a percentage of the total utility bill based upon an agreed-upon percentage set forth in the lease at inception. 6.11 Insurance Issues In most commercial leases, the tenant pays directly the cost of insurance on the leased premises. When there are multiple tenants, each tenant will pay its pro rata share based on its proportionate share as set forth in its lease. Alternatively, the landlord may pay the cost of insurance and be reimbursed on a monthly or annual basis by the tenants. With respect to ground leases, where the tenant typically owns the improvements, the tenant will pay the cost of insurance. charges attributable to that tenant. 6.10 Payment of Utilities and Telecommunications
Most leased properties are insured against fire and other casualty. In larger projects, terrorism insurance may be included. In certain geograph - ic regions, insurance will include one or more of earthquake, ground subsidence, windstorm and hail, and flood insurance. In addition, many owners of a leased property will carry rent loss and business interruption insurance. 6.12 Restrictions on the Use of Real Estate Landlords are free to restrict the use of leased premises by way of restrictive provisions in the leases. In addition, the permitted uses of leased premises will always be subject to general zon - ing and use limitations applicable to the location of the leased premises irrespective of the provi - sions of the lease. 6.13 Tenant’s Ability to Alter and Improve Real Estate Whether a tenant may alter or improve the lease premises is governed by the terms of the lease. Typically, a lease will expressly prohibit alteration or improvement of the lease premises without the prior written consent of the landlord. If altera - tion or improvement is allowed, the landlord will require indemnity against mechanic’s liens and other liability from the tenant and require the payment of any additional insurance premiums resulting from the alteration or improvement. The construction or alteration of leased premises will also be subject to the general construction and permitting requirements of the jurisdiction. 6.14 Specific Regulations There are safety regulations applicable to high- density uses, such as multifamily properties, hotels, and office buildings, including require - ments for smoke detectors, sprinkler systems, isolated stairwells, firewalls, and general resist - ance.
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