Entries for month: June 2011
When you are considering leasing an office warehouse space or any space for that matter, you want to go in to it with eyes wide open. The following will help you understand what to consider and hopefully help make your experience with leasing space a better one!
Students of history recall the stories of the landlord abuse that occurred in the late 1800’s/early 1900’s when tenant farming, mining towns and tenant exploitation were common. Fortunately, these situations have been largely extinguished in the US, but adversarial feelings between landlord and tenant remain. Is landlord abuse prevalent today when leasing space? Are they truly ogres? Or does the modern media sensationalize a few occurrences to feed this perception?
In our experience, most landlords are reasonable and fair. However, since they know the tools of the trade, often they get the upper hand in the lease agreement and structure contracts to their advantage. Many tenants, surprised by requirements of their lease after they move in, develop an “us vs. them” attitude.
Tenants can level the playing field by taking a few minutes to unravel the “legalese” of the lease agreement before signing. Often a 20+ page document, however, makes this a daunting task– unless you know what to look for. Here are 4 costs that some landlords quietly shift to tenants and what tenants can do to protect themselves:
- NNN Expenses:
Check the lease for the term “base rent.” If you find it, the lease you
are about to sign is a “triple-net lease” or NNN Lease. This type of lease requires the tenant
to pay for all of the expenses to run the property (such as property tax,
insurance, exterior painting, etc.). If any of these expenses increase,
it’s the tenant that pays more, not the landlord. If the building is painted or the
asphalt is replaced, once again, the tenant pays the bill. And the worst
part? The tenant doesn’t get to vote.
It’s not a HOA.
Tenant Protection: Sign a “gross lease” vs. a NNN lease. Gross leases require the landlord to pay the property operating expenses. If a gross lease is not available, negotiate limits to NNN expenses into your lease agreement.
Maintenance Costs: [Skip this
section if your lease says “Full Service Lease.” Full Service Leases are
typical of office buildings.]
Most leases require tenants to maintain everything inside of their
space at their own cost. Maintenance can include bath fixtures, light
fixtures, carpet, drywall, etc.
Tenant Protection: The easiest way to avoid these costs is to lease space at newer properties. Prior to move-in, request a walk-through with the property manager to document any defects in writing and with photos.
- Utility Costs:
Responsibility for utility costs varies from landlord to landlord. Ask
questions to determine who pays for what. The cost for
electricity/garbage/water may be included in the rent at one property but
not at another.
Tenant Protection: A good understanding of the utility costs is required to get a true “apples to apples” comparison of the cost to lease different spaces. It also prevents an unwelcome surprise after you move in. No one wants an unexpected $300/mo. utility bill!
- HVAC Costs:
Heating and cooling systems are big ticket items. Once again, treatment of
HVAC costs varies. Find out who is responsible for maintenance and major repairs/replacements.
Maintenance may be only a few hundred dollars per year, but a replacement
can cost over $5,000.
Tenant Protection: Negotiate a limit on contributions to HVAC repairs - $500 per year for example. Check replacement language – it isn’t uncommon for tenants to receive a $3,000 bill for a replacing a 15 year old system when they’ve only occupied the space for two years.
Again, most landlords are fair. If you are billed for an unexpected expense, contact your landlord. Compromise may be possible. Often, they aren’t the ogres they are reported to be.
Guest Post by: Barry Raber
Check out our website for more tips, resources and other cool stuff, http://OfficeWarehouseSpace.net
Not only did the Government enact the American with disabilities act, but also the ADA Amendments Act of 2008 (ADAAA) of which the final regulations were published in the Federal Register on March 25, 2011. Find out more at Questions and Answers on the Final Rule Implementing the ADA Amendments Act of 2008.
From the Q & A and ADAAA
"These regulations apply to all private and state and local government employers with 15 or more employees, employment agencies, labor organizations (unions), and joint labor-management committees. The Amendments Act retains the ADA's basic definition of “disability” as an impairment that substantially limits one or more major life activities, a record of such an impairment, or being regarded as having such an impairment. However, it changes the way that these statutory terms should be interpreted in several ways, therefore necessitating revision of the prior regulations and interpretive guidance contained in the accompanying “Appendix to Part 1630—Interpretive Guidance on Title I of the Americans with Disabilities Act,” which are published at 29 CFR part 1630 (the appendix)."
"Both public comments and comments received during the inter-agency review process under EO 12866 highlighted a variety of limitations in our analysis. Indeed, the alternative that we later present indicates that the figure of 8.2 million people with disabilities used in the preliminary analysis significantly underestimated the number of workers with impairments whose coverage under the law will now be clarified."
"Thus, based on this data, the number of individuals with the impairments cited in § 1630.2(j)(3(iii) could be at least 60 million. In addition, we know that people with many other impairments will virtually always be covered under the amended ADA definition of an impairment that substantially limits a major life activity or record thereof."
"If we assume 64% of individuals with these disabilities are in the labor force, then the number of labor force participants whose coverage is clarified under the ADA is approximately 38.4 million."
"The most recent JAN study, issued September 1, 2010, reported a mean accommodation cost of $1,183, based on 2009 data.Show citation box Using estimates of both the mean and median cost of accommodations, the preliminary analysis estimated that the ADA Amendments Act and these regulations would result in increased costs of reasonable accommodation of from $19,000,000 to $38,000,000 annually."
For more information visit The Job Accommodation Network (JAN) - the leading source of free, expert, and confidential guidance on workplace accommodations and disability employment issues. Working toward practical solutions that benefit both employer and employee, JAN helps people with disabilities enhance their employability, and shows employers how to capitalize on the value and talent that people with disabilities add to the workplace.Office Space
A recent study by the Massimo Group of hundreds of commercial real estate brokers in numerous companies indicate that the brokers are expecting a slow recovery over the next 12 months.
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Saving money in operating your office is always a plus and there may be ways you can save a lot with little effort that you may not have thought of before. Even small savings add up over time and can really make a difference in your bottom line over the course of a year. Here are some ways that you may find fit perfectly into your business that make sense for saving dollars:
Print Responsibly: It costs money to print; paper costs money and uses up resources even if you choose recycled paper. Do you print every version of a contract or document, even when you know there will be several more versions before document signed off? You can red-lined and add comments using these functions built into all of today’s word processing software and it is much more efficient than hardcopy and red pen mark ups. It’s even more cost effective using electronic mark up because corrections and changes can be accepted or rejected by the document owner automatically rather than being retyped. Print only those documents needed for maintaining legally required files, customer contracts, and important reference documents you will use often. Any reference document you will only refer to only occasionally should be stored on your computer or network server and accessed as needed. Not only do you save money but also the number of trees being cut for paper products is reduced, reducing your organization’s environment footprint.
Right Source Labor: Overtime for employees is expensive and sometimes really isn’t welcomed by the employee needed for more than 40 hours when projects pop up needing attention. Employee burnout is always a problem and asking for extra hours can add to this problem. Of course, only trusted long-term employees can perform many of the tasks in your business, but temporary or part-time workers can easily do others. Hiring temporary labor from agencies can be nearly as costly as asking your employees to work overtime. Maintain a list of local freelance workers who can be called in for periods where routine tasks must be performed. Examples include preparing mailers and applying mailing labels, entering data into spreadsheets, copying and collating handouts for seminars and presentations, and there are many other tasks you’ll have based on what your firm needs. Often, you will find some of your employees have teens who would love the chance to earn a bit of extra money by working a few hours as needed. You can find temporary staff by posting on Craigslist.org for your area. A freelance worker working virtually from a location other than your office may easily do some tasks, such as entering data into spreadsheets from another online source. Save expensive overtime costs for when you really need their expertise during extra hours.
Right Size Travel Expenses: Sometimes you simply must travel to attend a meeting or seminar. Perhaps you must visit an important client in another city. But most company travel budgets can be trimmed significantly if technology is used effectively. Invest in good quality video teleconferencing equipment and, for the cost of one or two meetings in another state, you can hold meetings face to face with people around the world forever. The equipment today is affordable and allows people to feel as if you are sitting at the table with them, even if you are in another continent. Even if you do feel a human presence is essential at the client’s site, when you do need to travel you can often reduce the number of people that go on the trip, combining video conferencing with on-site representation. You’ll recoup the investment in any equipment you purchased and the additional savings will amaze you after only a short time.