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Commercial Property Manager – Retention on a Commercial Lease

If the tenant is occupying the space as a result of the expiration of a lease, then they are likely doing so under what is known as a prior lease ‘hold’ situation. If that is the case, it is necessary to inspect the original lease (even if it has expired), since the hold provisions of most leases allow occupancy rights and obligations to be extended during the hold period. In other words, tenant rights still extend to the monthly tenancy period and the landlord must still act as if the lease is still active when it comes to maintenance response processes and activities.

The most important fact to emerge from this lease review is that all leases in a building may have different obligations and performance criteria when it comes to service requirements. The client needs to know what these things are and act accordingly. If you are the landlord’s property manager, it is your responsibility to understand all lease agreements and assist the client with this process.

This review of the lease documentation may also mean that the service response for tenants in one building may be different than for tenants in another building. The response processes you provide to service requests will therefore be designed for the property, the client, the tenants, and the lease.

Look for things like:

  • Obligations of the lessor and answers about anything to the lessee
  • Obligations of the tenant and answers about anything to the landlord
  • Default Lease Provisions
  • Required Communication Methods Between Landlord and Tenant
  • Dates and times of the gasoline provisions of the leases
  • Forms of payment of rents or expenses
  • Forms of payment for food

Be aware of lease agreements that commonly apply to municipal or government type leases; they will normally have special clauses stipulating service and maintenance response parameters. You will also see clauses that name situations that are not acceptable to the tenant and therefore something that you can use as a reason to avoid paying rent. Air conditioning is usually one of those issues. If you have a restricted lease focused in this way, you will need to structure special methods to interact with the tenant and protect the landlord’s rent.

Property managers must be very comfortable reading and interpreting lease agreements as they apply to tenant occupancy and the function of the property. Leasing is the backbone of property performance.

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