Chris Carmen / February 25, 2017
Disputes between landlords and tenants can take many forms. We take a look at how this business aggravation can be remedied with the guidance of tenant representation and present options for managing a tenuous landlord situation.
Dealing with a difficult landlord can be an aggravating, time-wasting ordeal for business owners and managers responsible for the real estate decision making. Yet, sometimes the advantages and appeal of an office property make it worth putting up with some level of discomfort.
When surveying property as a possible site for your business, it’s important to note the difference between professionally firm and difficult. Any gut instinct you have about your relationship with a prospective landlord, including the leasing agent, should be followed. In the end, you’re the prospective tenant and have the advantage of walking away.
It’s at this point in the Tenant-Landlord “courtship” when the landlord should be most reasonable and accommodating. After all, the tenant is a possible customer who will pay rent in the future if they elect to lease space. If the landlord isn’t reasonable during the courtship, it’s likely the landlord will be unreasonable after the lease is signed. Honeymoon or lack thereof is over.
This is one of the valuable services an experienced tenant advisor can provide during the leasing process. They deal with the landlords in their market every day and their clients have likely leased space in many of the buildings in the market. When it comes to landlords, a good tenant rep knows who’s good and who’s not….who is servicing their tenants, and who are treating tenants like a necessary evil.
What if your landlord transforms from reasonable Dr. Jekyll to out of control Mr. Hyde at mid-lease term? React as soon as possible. Are you seeing unexplainable jumps in expenses or blatant violations of the lease? Are your employees being asked to abide by new, undocumented building rules? If issues arise that will affect your “quiet enjoyment” of the space, you may have grounds to pursue legal action. Prior to doing so, please consult your attorney and preferably, consult a real estate attorney who has expertise in dealing with this type of situation. If the landlord’s behavior escalates to the point of affecting the productivity of your employees and your business, take that as a warning and do not consider renewing…simply prepare to move upon expiration.
The nature of the tenant-landlord relationship dictates there will be times of tension. Tenants need to sometimes step away from a tension-filled situation to gain perspective on the severity of the situation and how it is really impacting business. Once of the severity of the situation is assessed, a business owner can then best react on behalf of the company’s best interest and well-being.
Unfortunately, as a tenant, you are always at a disadvantage in a tenant-landlord dispute. The landlord is the real estate expert and the tenant is not. Therefore, whatever the landlord says is simply accepted by tenants as acceptable, regardless of how unreasonable it may seem. When a tenant-landlord situation escalates into a dispute, in addition to their attorney, tenants should seek the counsel of an experienced real estate broker.
Needless to say, don’t seek out advice from the landlord’s listing broker…the listing broker will likely attempt to convince you a landlord is a reasonable person. This isn’t an objective opinion since the landlord pays the listing broker fees to lease the building and the broker is well aware of their allegiance. Select a broker who does not have a relationship with the existing landlord and ideally represents tenants on an exclusive basis. A qualified broker should be able to give you valuable insight to formulating a plan to deal with the existing landlord, as well as a strategy to conduct a market evaluation for relocation at the end of the current lease.
Carmen has provided tenants with guidance during disputes with the landlords because we represent Indianapolis office tenants exclusively, without conflict of interest that occurs when brokers represent both tenants, as well as landlords. Simply said, we have no allegiance to any landlord and focus our loyalty on our tenant client. And our relationships with a strong tenant base also gives landlords pause before taking an unreasonable position with a tenant they represent.
Learn how tenant representation has benefitted our client, T2 Systems.
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