Tenant Representation: A Thorough Lease Review Will Save Money
June 27, 16
When reviewing your office lease don't get caught in the trap of reviewing the major clauses and overlooking the fine print that can cost you greatly down the line. You may think you have a handle on your fixed cost, but many details can be hidden in the gray areas. This is one way tenant representation can can save you thousands of dollars over the life of your lease.
What Is a Square Foot?
Of course, we all know what is a square foot. But in terms of a lease, what's important to the tenant is knowing exactly what the landlord is measuring into your square footage and the area affected by common area maintenance (CAM) fees. Are you paying for roof overhang? Sidewalks? Balconies? The landlord will try to collect for every square inch possible through calculation of your square footage and areas included in CAM fees.
Right to Expand, Contract or Assign
You know your business' space needs now, but do you know what kind of space you will need in 5, 10 or 20 years? By including language in the lease, you can preserve the right to expand your space, contract or even assign subleases if you determine in the future you need less space. Property owners frequently try to block your ability to sublease, but during lease negotiations is the time to give yourself that opportunity, even if the landlord will agree to sublease only a percentage of your space.
If you landlord should lose the building in a foreclosure or decide to sell, you don't want to be surprised by an eviction notice. Negotiating a non-disturbance clause into the lease to protect your rights in case the building title transfers will protect your business. If the landlord seems offended if you ask for such a clause, consider this a red flag as maybe the landlord already is in trouble.
Reserve Your Audit Rights
Tenants have the right to reserve an audit for overcharges on lease space or CAM fees. This could involve remeasuring a building if you suspect something is amiss or a financial audit of CAM fees, but you may have to pay the up-front cost of the audit. You can however negotiate that the landlord must reimburse a reasonable amount of that cost if the audit uncovers incorrect measurements or excessive fees.
The good news is that as a tenant, you don't need to know all of this information with each lease you enter into. LandPark Commercial can handle your lease review and negotiations, saving you potentially thousands of dollars. Contact us today to preserve your tenant rights.