To avoid any unpleasantries, there are a lot of bases that a commercial landlord should cover and also many considerations before leasing property. From tenant selection and screening to competition clauses and sureties, we recommend that you read our top tips for commercial landlords.
1. Selecting Your Tenant
Choosing a tenant is the first step in what we all hope will be a long and mutually beneficial relationship, so, remember to screen prospective tenants and choose wisely.
Some points to keep in mind when selecting a new tenant:
– You cannot discriminate on race, gender, etc.
– Select a tenant that adds value and/or fits the culture of your commercial building.
– Ensure that you are not infringing on any anti-competition clauses (i.e. contracting another tenant with the same product, service or target market as your existing tenants).
– Undertake credit checks (remember to get the prospective tenant’s consent first).
2. Written Agreement With Sureties
We strongly advise clients to ensure that everything is set out in writing. Having a written agreement with sureties adds an extra layer of security for you as the commercial landlord.
A word of advice from your commercial law experts:
– Have lease agreements drawn in the name of the business entity, additionally have the directors sign surety on behalf of the entity.
– If the tenant is a sole proprietor – The Consumer Protection Act may apply.
It is always important to be fully aware of the state that your commercial property is in. For this reason we recommend conducting an initial ingoing inspection, and regular inspections throughout the lease period, as well as an outgoing inspection.
How to approach your commercial property inspections:
– Perform and document joint ingoing inspections.
– Perform regular checks/informal inspections (to protect both the landlord and the tenant). As the landlord of the property, you must ensure that you give reasonable notice before attending upon the leased premises.
– Perform and document a joint outgoing inspection (both tenant and landlord participate, and agree on the state of the premises, and compare to the ingoing inspection).
4. Rental Collection Processes
At the end of the day, your rental collection process ensures that your commercial property is generating an income, it is for this reason that they need to be flawless.
We highly recommend that you:
– Have effective rental collection processes in place and attorneys on brief to assist with formal collections and legal action.
– Be consistent and do not allow rental to remain in arrears.
Above, we have just touched on the areas that commercial landlords seem to find the most hassle and given a few tips on how to safeguard yourself and your property. If you are a commercial landlord looking for more assistance and the services of a lawyer, to offer expert advice and other legal services, contact our approachable and experienced team.