TriniboyX asked:


I am a landlord that rent out a commercial property. Is it necessary for me to produce a monthly invoice to my tenant even though the lease states payment date?
This is For the New York City Area

Peter asked:


I have owned a preschool, going on, five years now. I have had constant issues with the leaking in the roof, that has lead to much damage, including lose of customers. I have asked multiple times for my landlord to fix this problem, but it has either been ignored or done so of such poor quality that the issue is still a major problem.
I faced a law suite because of this due to the sealing tiles collapsing and water pouring on one of the children.
With my lose of business and law suite due to this issue it has made it hard for me to pay the rent, though i as well feel i should not have to pay the full amount.
Besides this there are many other issues that the landlord chooses not to tend to, as is said to be his responsibility in the lease.
I took it upon myself, though after many written letters, to lower my rent money. I feel as though it is not my responsibility or problem and why should I pay for full rent when I am not getting the quality I deserve.
I am now facing eviction and NEED to know if there is anything I can do to save my business before it is to late. Please can someone help me with this? I need to know what my rights are as a tenant in the state of new jersey, and what i can do to stop this eviction from going through.
Do i have any rights?!

Timothy Rea asked:


Can you afford commercial real estate on the Chicago Magnificent Mile? If you can, your business will be in good company, and you can make a lot of money!

A festival of restaurant dining, theater and jazz experiences, shopping, hotels and entertainment, Chicago’s Magnificent Mile is abuzz with activity from Spring through Fall, and those merchants and commercial vendors who are lucky and wealthy enough to rent space in Chicago’s most productive real estate market, are the fortunate recipients of some pretty hefty income.

The Magnificent Mile stretches from Randolph Street to North Avenue and from Lake Michigan to the North Branch Canal, and it is Chicago’s most expensive commercial real estate.

The landscape is flush with fancy hotels including the Inter-Continental, the Ritz-Carlton, Hilton, Omni, Le Meridian, Hyatt, Wyndham, the Westin, the famous Whitehall and many other world-renowned hotels share this prestigious real estate, and the Greater North Michigan Avenue Association manages the business district.

Within this precious Chicago real estate, street festivals, garden shows, food festivals and other events are planned, all to bring local residents and tourists to spend their entertainment dollars.

Along this stretch of expensive real estate you can also find posh, formal restaurants like Les Nomades, and NoMi intriguing international restaurants where you can find Brazilian, East Indian, French, Italian and cuisines from many countries around the world.

The Chicago Shakespeare Company is also in residence in the Magnificent Mile of Chicago Real Estate, as are a number of jazz clubs and galleries like Kenneth Probst, Peter Bartlow and R.S. Johnson, selling fine art, antiquities and much more.

Water Tower Place, the Shops at North Bridge, Chicago Place and the North Michigan Shops also offer commercial real estate opportunities in well-advertised storefronts, malls and real estate centers.

If you are looking for commercial real estate in this area of Chicago, be sure you employ a reputable broker. Rents are high and real estate is precious. Options to extend commercial leases and expansion options to take on more space will come at a premium in this real estate market.

Upscale brokers like Gordon McAdam, Property Management companies like Zeller, and Executive Suite brokers like AMATA deal in finding and leasing commercial real estate and space to businesses in this area.

If you are looking for Chicago real estate on the Magnificent Mile, be sure you find a company that will work with you to assess your square footage requirements, and do an office or building search that will take into consideration the ideal location for your type of business.

These companies can also help you analyze the commercial lease you will be asked to sign and negotiate more favorable terms. Some have partners that offer architectural and build-out services for your real estate needs, and even move-in and utility hook-up services.

If you DO rent commercial real estate along the prestigious Magnificent Mile in Chicago, make the most of your network by joining the Greater North Michigan Avenue Association. Membership in this business and real estate district association provides you the opportunity to participate in business-to-business marketing activities and to have your logo and business identify advertised and promoted in the Magnificent Mile events and activities.

The Board of Director’s for this Chicago real estate business district and association always includes prestigious hotel managers and business managers for large commercial vendors like Neiman-Marcus, as well as business district and service vendors who provide the local transportation. These are good people to know if you want to promote your business.

Get to know the individuals who share this small square of real estate with you and leverage their connections to help you make more money and pay that steep rent bill every month.

Per square mile, this patch of Chicago real estate will produce more income for your business, but it will cost you a pretty penny to house your business here.

If you want to consider Chicago real estate with a slightly less onerous price tag, you can consider real estate in the Riverfront area, which is very near the Magnificent Mile and attracts lots of tourists. There are lots of events there and the overflow of shoppers and tourists from the Magnificent Mile is a definite advantage to renting commercial real estate in the area.

Ask your Chicago real estate broker to make some recommendations and see what you can afford. Good luck and enjoy the ride!

Glenn J. Rigdon asked:


While many people do not consider the possible use of a ground lease or land lease, ground leases offer a great way to retain a long-term ownership interest in real property that can significantly benefit heirs, while providing a current income stream. Vacant land that an owner may not be able to develop on his own can also reach its full development potential sooner using a ground lease. Most ground leases are negotiated with a provision that calls for the short-term development of the land, and once developed land owners / landlords have a relatively small risk of loss.

In Las Vegas, ground leases are used periodically but they have not been a mainstay in the real estate market. Given the cash crunch caused by the “Recession of 2008,” however, more land owners are considering them. Waiting for an end user to purchase a property, when most cannot get bank financing, can be costly. A ground lease provides and alternative to waiting that appears to be promising in the current economic climate.

Establishing a base return rate for a ground lease is not as difficult as one might imagine. Discovering the current market value of a property to be leased is the first step, and it is usually accomplished via an appraisal. With regard to the rate of return, if you were to sell a property for cash and invest the proceeds with as little risk as possible, you have established a base or minimal return figure. The near risk free rate paid on government treasury bonds is usually the base rate. Since more risk is associated with a ground lease than with holding government bonds a risk premium is usually added to the base rate.

One of the biggest issues associated with a ground lease in Las Vegas, as elsewhere, is position or subordination. If a developer is going to borrow money to improve a site, the lender generally wants to be in first position. Since the underlying land owner sees this request for subordination as a way to separate him from the land asset, and the bank feels its investment is larger and should be superior to the underlying land owner, some ground leases fail to materialized due to this security issue. Ground leases are most attractive to land owners when no financing is required for the development of improvements.

Another difficulty establishing a ground lease is the provision regarding rental adjustments. The Consumer Price Index (CPI) adjustments is often built into building leases, and at times CPI adjustments are adopted in ground leases. CPI adjustments provide the tenant with some assurance that they will not be caught up in a revaluation due to an explosive land market. The downside of using a CPI adjustment for the land owner is that the land may dramatically increase in value over time and the land owner will be stuck with the contract terms negotiated based on a much lower value.

Once established, the sum of the net present value of the income stream from a ground lease plus the discounted value of the remainder are the basis for value. So poorly structured ground leases can destroy the value of a parcel of real property.

Thus, ground leases can be detrimental to an owner or tenant if not well crafted. I have personally evaluated a real property encumbered by a 99 year lease with a 60 year term remaining that provided the leased fee owners with a return so low that their heirs could not afford to pay the tax bill. I can’t think of anything worse than being conveyed an asset worth several million dollars that just costs you money every month and that will likely not provide you with a benefit during your lifetime.

The opposite side of the coin is a lease that favors the owner so much that the tenant cannot afford to pay the monthly rent. Driving your leasehold tenant into bankruptcy is also not the best scenario for a long-term lease relationship.

Under certain circumstances a ground lease can be beneficial to both a landlord / owner and a tenant. Recent market changes in Las Vegas have opened land owners to the possibility that a ground lease may be a valuable tool to get a deal transacted. Great care must be taken to develop terms and legal provisions (with the aid of your attorney) that will remain reasonable over the life of the lease. Thus, the use of a ground lease in Las Vegas is being considered by owners and developers as a serious alternative to traditional land sales.

annd asked:


Hi! I was looking to buy a 300 chrysler and checked the carfax report on it. The car has no accidents but it has 7 records in the report. Does it look good to you? Here it is:

Date: Mileage: Source: Comments:
11/16/2006 Arizona
Motor Vehicle Dept. Registered as
commercial lease vehicle

11/16/2006 18 Arizona
Motor Vehicle Dept.
Title #0D09006320014 Title or registration issued
First owner reported
Registered as
commercial lease vehicle

03/01/2007 5,977 Service Facility Vehicle serviced
Oil and filter changed chassis lubricated

07/27/2007 19,574 Service Facility Vehicle serviced
Oil and filter changed chassis lubricated

01/10/2008 38,691 Service Facility Vehicle serviced
Oil and filter changed chassis lubricated

03/26/2008 43,743 Auto Auction Sold at auction
in Desert Southwest Region
Listed as
a fleet vehicle

04/04/2008 Dealer Inventory
Phoenix, AZ Vehicle offered for sale
The odometer is 43,743, and the chrysler is 14,000$, is it worth it?

Asad Haroon asked:


There are commercial leasing vendors for just about every piece of business-related equipment, including photocopiers, computers, office furniture, office space, etc. Commercial leasing allows a company to rent equipment and facilities instead of purchasing them. When you lease equipment, you will also be able to upgrade your equipment at the end of the term of the lease, which helps ensure that you have the latest technology available.

Leasing may offer substantial financial benefits because it is less capital-intensive and offers more flexibility, allowing a company to make short-term location and equipment decisions that can be easily changed at the end of the lease. Leasing may provide different tax and financial reporting treatment when compared to ordinary business expenses.

As you can imagine, choosing the right commercial leasing vendor can be challenging. If you need help Click Here. To ensure you find the right vendor for your needs, consider the following:

•Make a List of What You Need – Assess what pieces of equipment you will need. Do you need furniture or a commercial photocopier? Find a company that can provide more than one item because they may provide a bulk discount for multiple items.

•Space Leasing – Many office space facilities will also lease items such as furniture, a copier, and other equipment. Check before leasing these separately.

•Estimate Purchase Versus Lease – Some items may be worthwhile to purchase, such as computer, but remember, you will have to pay taxes at the time of purchase AND on an annual basis for as long as you have the items.

•Check References – Check the Better Business Bureau for information and do a Google search to uncover negative feedback about a company before you commit to a contract.

•Up-Front Fees – Many companies have up-front fees for their services. Ask about any and all fees associated with each lease. Some items may have different fees than others. You may pay a higher depreciated asset fee for a computer than you would for an office chair because of the rate of depreciation.

•On-Going Fees – What are the monthly fees to lease each item? How do these fees compare with comparable items that you could lease from other companies?

•Early Termination Fees – Make sure that you understand the early termination policy. If you choose to leave your current office space, will you be able to take leased items with you? Will you have to pay an early termination fee?

•Lease-to-Own – Some companies have lease-to-own programs so companies can make purchases at a lesser rate at the end of the period of the lease. If you decide that you want to keep certain items, you may wish to have the option of purchasing them once the lease expires.

•Damage and Replacement Fees – Who covers the cost to replace or repair a piece of equipment that you accidentally damage? What is considered normal wear and tear? Make sure you understand the fees in advance.

Before entering into an expensive commercial leasing contract, check with your accountant to see how it will impact you vs. purchasing. If you want commercial leasing vendors to compete for your business, click here. For additional information, you can visit our Commercial Leasing wiki.

Timawa asked:


Feel free to change or add a sentence…

Dear Ms. Johnson:

We appreciate your giving us the opportunity to look into the problem you describe.
As the owner of the Peachtree Business Plaza, I understand how the noise interferes with your conversations with clients.

Since commercial leases are different than residential leases and can not contain language limiting noise, Mr. Chomko, as a commercial tenant, is entitled to conduct his business at this plaza.

I have done much thinking and I feel that the best course of action would be for the 3 of us to discuss this over lunch and that way we will be able to come up with the best course of action.

Sincerely,

Bryan Halverson asked:


With the benefits of leasing over purchasing office equipment outright, many start-up businesses and expanding businesses are making the choice to lease office equipment. Businesses often choose the leasing option due to the benefits offered over buying. Leasing offers tax deductions, credit building, preserving initial cash flow, flexible terms and the ability to upgrade equipment easily. With all of the benefits leasing is a likely option when it comes to making the decision to buy or lease. After the decision is made to lease, where do you start?

Start with Planning

Planning is always a good place to start with any venture including when you decide to lease office equipment. Make sure you are aware of the space you have to work with concerning usable space. It is not feasible to have a top of the line copier, when the space allotted is not big enough to accommodate the equipment.

Research

The web has thousands of sites and reviews dedicated to the equipment pieces you are interested in leasing. Narrow down the pieces you might lease and check reviews in a few different places. Also research the average monthly cost. Savings of $50-$100 a month can save $600 – $1200 a year.

Understand Fair Market Value

Financial assets and liabilities give information towards fair values more so than historical costs value. The fair market value assesses the price at which a willing party would pay for the product at hand.

Know the Businesses Credit History

Leasing companies do run credit history to get a better understanding of what type of client you will be. Know the credit score of your company lower scores equate to higher interest rates and/or higher initial deposits. Know if credit will solely run off of credit bureaus, business references such as banks, or off of personal history. Knowing your business credit will help for better positioning during leasing term negotiations.

Understand the Terms of a Lease

One of the benefits of leasing is having varied leasing terms that are more accommodating to your business needs. A commercial leasing vendor should be more than just a leasing mill. The leasing company should be rooted in customer service. Do not be hesitant is asking for assistance with research and planning. A good leasing agent should be willing to help your business succeed, not just get you sign on the bottom line and write a monthly check.

With the various benefits of leasing office equipment, this is a business decision that should be taken seriously. Office equipment does seem to be a passive commodity, depending on the nature of the business. However the decision should not be passive. Make sure when you begin to lease office equipment you research, plan and know your standing when leasing equipment. You should also find a leasing agency willing to work with your business to accomplish your leasing needs in accordance with your business.

The points mentioned above should be more than enough in allowing you to understand the procedure to lease office equipment.

Tim Knox asked:


In the last article we looked at a few of the things you should consider before leasing that first office or storefront for your business. To recap, you should not only consider the old standard “location, location, location,” but also consider things like sufficient parking, the number of employees who will be working onsite, and future growth projections. I stressed that it was important not to get caught up in the moment. You should take your time to find the space best suited for your business for the long haul, not just for today.

This week we’ll discuss the most important aspect of the process: signing a commercial lease (insert dramatic music here). One of the biggest mistakes many entrepreneurs make when leasing commercial space is not reading the lease. Forget reading the fine print. When it comes to a lease its ALL fine print.

Don’t believe me? Let me tell you the true story of my friend, Homer, whose name I have changed to protect the ignorant. Homer signed a two year lease on a suite of offices for his business. As the owner of the business Homer signed on the dotted line and agreed to personally guarantee payment of the lease and to abide by its terms. Homer moved in and it was business as usual until the end of the two year lease term drew near. It was then that Homer discovered that failing to read the lease was going to be a very costly mistake.

Toward the end of the two year lease period Homer decided to relocate, but when he gave the landlord what he thought was the customary 30 day notice, he discovered that the lease had automatically renewed for another two year term at the 60 day notice point. In other words, Homer didn’t realize that the lease required a minimum of 60 days notice to let the landlord know that the lease would not be renewed. Because Homer did not know that he was required to give at least 60 days notice of his intent to vacate, the lease automatically renewed for another two years. And there was not a darn thing Homer could do about it but reach around and slap himself in the back of the head for not taking the time to read the lease.

What was the landlord’s position when Homer pointed out that he had not read the lease and therefore was not aware of the 60 day notice? The landlord, while sympathetic to Homer’s plight, stuck to his guns and told Homer that he would have to honor the lease, which meant that even if Homer moved out as planned, he was still on the hook for paying the rent for another two years.

Does the fact that the landlord chose to enforce the lease agreement rather than let Homer off the hook make him an evil man? Not at all. From the landlord’s point of view, he had no choice but to enforce the terms on the lease. He had a signed contract that told him his space was going to be rented for the next two years. He had not planned on the space suddenly being vacant. Being a landlord with unrented space is like being a business with no paying customers. Empty space means no revenue from rental fees which means no money to pay the mortgage payment. As the old saying goes, “It’s just business…”

Sure, any landlord with a heart might feel bad that Homer was ignorant of the auto-renewal clause, but not so bad that they are willing to risk their own financial well-being by having Homer’s space sit vacant. The bottom line is this: whether Homer read the lease or not is irrelevant. Homer signed the lease, thereby agreeing to its terms, and therefore he must hold up his end of the bargain, period.

As of this moment, Homer is relocating his business in spite of not being able to get out of his old lease and he will continue paying the payment on the vacated space for the remaining two year term of the lease or until he can sublease the space. Even then Homer is not fully off the hook because he will still be considered the legal tenant unless his sublessor agrees to sign a new lease with the landlord. Hopefully he will just have someone else making the lease payments.

Again, the moral to this story is READ THE LEASE. Or even better, have an attorney read it for you. I have learned over the years to never sign a legal document of any kind without letting my attorney review it, especially if the document involves money and my first born child.

Here are a few other points to ponder before signing a commercial lease.

How is the lease payment calculated? The most basic equation for calculating a lease payment takes the number of square feet times the cost per square foot, then amortizes that over a 12 month span. For example, if you have 1,000 square feet and the cost per square foot is $12, the annual lease payment would be $12,000. Divided by 12 months the monthly lease payment would be $1,000. Again, this is a simplified scenario. These days most commercial leases include additional factors that affect the final price, such as rent increases, operating expense escalations, common area charges, etc.

Who pays for what? It’s important that you understand exactly what you are paying for. Are you responsible for any costs other than the rent? Will you be responsible for paying your own utilities, for example? Will you have to pay for parking privileges or janitorial service? Who handles maintenance and repairs?

Is there an escalation clause? It is typical that the lease contain what’s known as an escalation clause that allows the landlord to pass on increased building operating expenses to the tenants. If your lease contains such a clause you should ask for a cap on the amount the lease payment may rise over a given period of time. And if the escalation clause is ever activated by the landlord you are well within your rights to ask for an itemized accounting of the expenses that are being considered as cause for your raise in rent.

What rent increases might there be? One very important factor to know is this: if you do renew the lease how much can the landlord go up on the rent? It is expected that rents will increase as property values increase. If your landlord can rent the space for more than you agreed to pay a year ago, he is within his rights to ask for the increase. However, it would be a nightmare if your rent suddenly doubled overnight. Negotiate the increase before you sign the lease. Most rent increases are calculated by percentage, not by flat rates.

Renewals and terminations. Most leases require that you give a minimum of 60 days notice if you intend to terminate the lease and vacate the property. As Homer learned, many leases also renew automatically for another term unless you give notice within 60 days of expiration. Know when your lease expires and the time required to give notice.

Is a personal guarantee required? What happens if your business goes south and can no longer afford to make the lease payment? Are you then responsible for paying the rent out of your own pocket? Probably so. Most landlords insist on a personal guarantee from the owner or an officer of the business. This means that even if you go out of business you are still personally on the hook for the remainder of the lease.

Finally, clarify all points. You should be clear on every point in the lease. And if you are not, ask for clarification. Exactly what space are you leasing? Who is responsible for repairs? What common areas will you have access to? Who is responsible for maintaining the little things, like keeping the shared restrooms stocked with soap, towels, and most importantly, toilet paper.

A small detail to consider now, but not when you suddenly find yourself without such amenities at the wrong time.

quickremodel asked:


I have an artist studio complex in CA with spaces that are for work only. 3 days ago I had a tenant move in who is living there with her dog (in the lease it says work only and no pets). We asked her to move out and she will not leave. What can I legally do? Thank you for your help