Tuesday, March 19, 2013

The Games Some Landlords Play!


Let me tell you a story. We were working with a nonprofit on a lease renewal in Ann Arbor. The original landlord of the building was excellent – the trouble only began when he passed away and his son took over. The lease had what we in the business call an ever-greening clause – which means that if the tenant doesn’t send a 9-month notice to the landlord to alert them that they don’t intend to renew the lease, the lease will automatically renew itself.
In our case, the tenant contacted the landlord well within the 9-month period asking for the rental rate, but the landlord neglected to respond until within a 9-month period. In addition, the landlord refused to talk with me on any of the renewal points. He promised the tenant that in order to make more space for them, he would relocate the tenant in the space adjoining our tenant’s current space. The complications of doing so go beyond things we can discuss on this blog, but let’s just say that at the time, our tenant believed him.
We worked to help the tenant with the design of the new space, and the tenant sent our information to the landlord so that we could move forward with the lease renewal. Meanwhile, the landlord refused to take our calls, speaking only with the tenants (a big no no). He also told them that since they had not given 9 months notice (which was untrue, they had, he just hadn’t responded), he (the landlord) would be in financial trouble if they left, and threatened to sue them for damages if they did so!
The minute that the timing wouldn’t allow them to relocate to a third building, the landlord pulled a fast one on them, telling the tenants he would not do their relocation. This had serious repercussions on the tenant’s business. What we know now is this: the landlord never intended to go through with the relocation, but the tenant was understandably na├»ve, and they believed him. Because the landlord refused to liaise with us, there was little we could do to help.
I was sick over this deal at the time, as I knew the landlord was misleading them. Luckily for the tenant, we were able to get the lease term down to a year on the renewal, but it was unfortunate and difficult for us to watch our client believe in someone who we knew to be unfair and dishonest from the beginning.
The moral of the story? Do some digging around on a landlord’s history and the way he treats other tenants before choosing who you’ll go with. Landlords might seem nice when they strike up a deal, but it’s hard to know what they’re capable of. Working with a tenant representative broker and doing your research beforehand can work wonders in helping you secure the best deal and find a landlord who will treat you well as a tenant.

Original from the Compass Blog: http://tinyurl.com/cc84wap

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