Saturday, February 21, 2009

Lease Agreements: Property Management

Dear Property Manager,

I have owned a commercial building in Concord for 2 years that I took over when my father passed away. I had hired my brother-in-law to handle the property management for me, but I am realizing now that this was a mistake. The tenants have been complaining about lawn maintenance, and building upkeep—including areas that I think are their responsibility, and have joined together saying that they will not pay rent this month unless I take care of these things. My lease agreement states that the tenants accept the premises “as is”—and are responsible for the inside building maintenance, but one of my tenants is an attorney, so I need to be careful. I don’t want to lose the tenants, but I don’t know how to make all the changes without increasing rent, or even if I am legally obligated to do so.

I need to help with this situation—and then hire a professional maintenance company. Do you have any suggestions?

Gary H. Concord, NC

Dear Gary –

First off, I need to say that I am not a commercial real estate attorney – and clearly you need to talk to yours.

What I can tell you is that most commercial leases provide that the landlord will take care of things like maintenance of the common areas of the property – and that includes the lawn maintenance, parking lot, common hallways or sidewalks. Generally, unless the property is a single-tenanted building, the lawn, for example, is not under their control. There is a part of your lease that deals with your specific landlord obligations, and probably addresses what you are responsible for. It would probably be best for you to consult your lawyer to assist in interpreting whether you are entitled to recover the costs associated with upkeep of the common areas, and repairs. But my recommendation would be to make the repairs and hire a qualified property management company immediately to deal appropriately with tenant satisfaction and management. In the long run, you will save money and frustration, and keep your building filled—which in this economy is especially important.

If you would like to speak to someone in our Kuester Concord office, give us a call at 803.578.7701.

Property Manager
Kuester Property Management

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