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Tips on how to be a Smart Tenant

Each day in metropolitan Phoenix there are scores of successful lease transactions completed. Most Tenants consider a successful Tenant-Landlord relationship as one which both parties receive what they expect from the beginning, and for the duration of the lease. A key to making the Tenant-Landlord relationship work is the Tenant responsibly identifying in advance, what their occupancy objectives are, and matching this with what a Landlord can or will provide.

The following points are presented for the Tenant to consider when Leasing. They are not in any particular order, but are intended to raise awareness. You are strongly encouraged to obtain professional Representation and Legal and Tax counsel prior to entering into any effort. In negotiating any transaction, you want to use TIME, INFORMATION AND POWER to your advantage. In leasing this may be translated in several ways:

TIME: The earlier you can begin your search for space the better. Knowing when a Landlord has vacancies coming up. Allowing yourself leeway if improvements deadlines can't be met. Everyday a space is empty, the Landlord cannot recover that rent. Also, don't focus so much on one property that you get behind timelines if a deal cannot be struck.

INFORMATION: Know the market. Most Landlords and particularly the Landlords Agents are in the real estate business everyday of the week. You probably have another business to run. A Tenant Agent is in the real estate business everyday and can provide you the expertise when you need it and for your objectives.

POWER: If you have a strong financial position, do not wait until lease signing to show it. Landlords want good credit Tenants. You can enhance less than strong financial positions with good advance documentation such as Bank References, Vendor recommendations, and even personal resumes.

Other points to consider:

• Look at the Building Directory. What types of use is the spaces being used for? Medical uses tend to soak up parking at peak times. Telemarketers can really fill a parking lot.
• How close are sandwich shops or drycleaners? Can you find a battery for your Nano when you need it?
• Proximity to Freeways is important for both Clients and employees. Tenants in inaccessible locations may find it more difficult to attract employees. Do you need to be on a bus line for employees access? Don't assume they all drive, or would if they had an option.
• A $25 per month charge for a parking space is the equivalent of adding $2 per foot per year to the rent, based on each employee occupying 150 square feet of space. A $35 per month charge adds $2.80 per foot per year.
• Ask the Landlords Agent who the Landlord is and if they have a local contact with decision making authority. Also, the Property Manager may be different than both the Landlord and Landlords Agent. Ask other Tenants about their experience with each.
• Your lease document is the story everyone relies on when there is difficulty in a relationship. A thorough document, understood by the parties, is better than a short document leaving issues unclear. If you don't understand it now, it won't get clearer in a dispute.
• Tenants should seek as much consideration as they can get toward dispute resolution. This means adequate time to cure defaults and respond to Landlords actions. Notices should always be required to be given in writing.
• Look at the Property's rules and regulations closely. Landlords may insert terms and conditions which go along with the lease but cause a conflict as to how you expect to operate your business. It wouldn't hurt to have a clause that requires you to be part of the process for approval for changes that a Landlord makes in their rules and regulations.
• Make sure you have your insurance requirements met before you start your move. You are at the highest risk for injuries and theft in new unfamiliar surroundings.
• Signage has become very expensive. Some buildings have standards that may be different than what your logo can be. Also, be aware that Landlords will charge to be on monument signs if they can.
• Environmental liabilities before, during, and after your occupancy should be addressed in the Lease.
• View the property you are considering at night to check lighting and safety issues. Take other employees with you to get their impressions.
• Properties located next to apartments tend to have higher exposure to trouble. No property is immune.
• Ask someone who does not know the building to find it on their own. This will give you an idea of what a guest might experience.
• Ask the Landlord (or his Agent) as many questions about what they are offering as early as possible. This gives you the knowledge of what is standard to them and what may be an extra.
• Make sure the rental rates you are being quoted are all on the same basis. For example, a modified gross lease may seem alot cheaper when compared with a full service lease. Terms like NNN, Full Service, Modified Gross mean different things to many.
• Consider finding a sub-lease from a current tenant. Many Landlords won't even tell you they have a tenant looking to sublease because they want to lease you their vacant space first. This is more difficult in our recent booming economy, but may happen more often.
• Talk with some of the current Tenants in the building. Ask them their opinion of the Ownership. Have they had any issues and were they resolved?
• Be cautious about granting the Landlord the right to re-locate you after you move-in. This happens when you are a smaller fish. Wording should consider all the typical costs and not leave out the less obvious, such as the staffs time for planning and carrying out the move.

Call the Buyer & Tenant Agent, Jeff Jennings, for specific property
details & FREE expanded reports at 602-265-4600