Over the last few years, most of my legal practice has been either evicting commercial tenants or collecting rents. Although on occasion I do represent tenants, most of my time is advising and educating landlords and trying to maximize their return on their leases and property. My experience tells me that, unless a tenant has substantial assets to afford good legal and real estate representation, they have been at a distinct disadvantage dealing with an insuring that their landlord’s deal with them in a fair way and in accordance with the terms of the lease.
I recently posted this comment on LinkedIn and did receive some comments and discussion, including the following comment from David Massie who wrote:
After working for some of the largest landlords in the US and directing their real estate companies for over 25 years managing millions of square feet and negotiating against hundreds of tenants, I heartily agree with Howard that tenants don’t lease smartly. This is one of the main reasons I now only represent tenants.
Here is an article I wrote on the subject: http://www.djmcre.com/articles. Scroll down to the one titled “Commercial Leasing: Never Do It On Your Own.
It amazes me that tenants try to lease on their own or use the landlord’s broker (or even same brokerage company) to do a dual rep. It’s like going into court to defend yourself or using your opponent’s attorney to defend you. Not highly recommended. And then there is the whole subject of why a tenant would not hire their own tenant rep broker since the landlord is paying for the commission, many times even for a lease renewal or expansion, and the landlord doesn’t credit the tenant for saving him this commission payment.
In response, I wrote:
It is a common misconception among inexperienced tenants, that they will save money if they do not use a broker to assist them in the lease process and they can handle it themselves. It is scary how wrong they can be.
That is part of the education process that as a broker, you need to do with your prospective clients.
I am a big fan of team building, particularly for the tenant who often does not have a team behind them when the negotiate a new lease. The tenant needs an experienced and knowledgeable broker, a good attorney and should consult with a lease administrator to make sure that the lease anticipates common administrative issues that the broker and attorney might not be familiar with. The lease administrator is the person who keeps the landlord honest over the term of the lease and is likely the one who knows all the little problems that cost the tenant money that don’t make it to the broker and attorneys attention.
I will be talking about this team approach as the keynote speaker at the NRTA Annual Convention on October 7th – 10th in Palm Desert, California. For more information on this topic, go to www.creradio.com