Written By Valencia Mackie©
As a commercial tenant, landlord and property manager the object of the game is to be on your toes when it comes to any and every aspect of the Lease. Time is everything when it comes to the Lease. For the sake of time and money as a commercial tenant, landlord or property manager –lease parties cannot make these five critical mistakes:
- FAIL TO R-U-A
Solution: RUA (read, understand and apply the lease) is extremely important no matter which side the table:
a.Read – read the entire lease and/or agreement prior to the execution of the document or Lease draft approval; from the top of the very first page to the bottom of the last page.
b.Understand –clauses that are vague, ambiguous or incomprehensible must be clarified, interpreted and/or modified prior to the execution of the document or approval of Lease draft. Understanding the Lease should alleviate most or any misunderstanding during the Lease tenure.
c.Apply – to ensure parties best interest pursuant to the Lease are carefully addressed, fulfilled and monitored all parties must implement tailored processes, protocols and/or systems.p
- FAIL TO ABSTRACT LEASE DOCUMENTS
Solution: Once parties understand the Lease it is imperative that information relevant to said party is abstracted from the Lease documents for quick reference, especially if the tenant or landlord has two or more locations.
- FAIL TO ESTABLISH AND MAINTAIN DOCUMENT CONTROL SYSTEMS
Solution: Parties must have a document control system in place to ensure that all documents can be retrieved and expedited quickly. A tenant or landlord should not have to go through piles of paperwork on their desks or disorganized hard or electronic files trying to locate documents which can result in lost time and money.
- FAIL TO APPLY, MAINTAIN AND STREAMLINE LEASE APPLICATION SYSTEMS
Solution: Relevant systems must be in place as mentioned in #1 to ensure that the Lease obligations of these parties are fulfilled. The systems must rotate around the Lease as the Lease is the heartbeat of the commercial leasing industry. The Lease consists of checks and balances to ensure all parties are following through with their obligations. The Lease establishes penalties that should be invoked if there is a breach of Lease by either party; therefore, systems (processes) must be in place for such.
- FAIL TO ESTABLISH AND MAINTAIN COMMUNICATION
Solution: Communication lines must be established and remain open between the tenant and landlord/property management company throughout the Lease tenure to ensure Lease obligations are being fulfilled in the best interest of all parties.
At the end of the day, it all boils down to what is in the lease whether you are a tenant, a landlord or property management working on the behalf of a landlord. The Lease can literally break either party directly or indirectly – as I stated everything revolves around the Lease. These solutions are applicable to all parties to ensure all parties have a successful and profitable Lease tenure. Don’t drop the ball in these critical areas as it can come back and bite, and bite hard.