How can you avoid tenant arbitration costs by resolving disputes early?

Establishing a two-way communication between the landlord and tenant is key to an open and transparent landlord-tenant relationship that will most likely help avoid any future disputes.

This is a great point. Sometimes, our clients (tenants) find that once a lease is signed, the communication is limited to getting notices of rental increases or "true up" statements. Good landlords will maintain ongoing communication beyond perfunctory notices.

Arbitration costs can be avoided when landlords are fastidious about providing back up detail to the true up statement and the base year, for example, is clearly defined in an office lease.

Based on my almost 15 years experience as a lease auditor, one of the first and most important thing is for the lease agreement to include clear terms, conditions, details and calculation mechanism. Furthermore, invoices, correspondence, statements should be properly documented and detailed. It is not only the key to a great landlord-tenant relationship but a sure way to avoid costly future disputes.

We've seen conflicts arise when a new landlord acquires a property, re-measures a building and then tries to increase the square footage for which the tenant is responsible to pay rent and operating expenses. This cannot occur if a lease properly addresses a re-measurement during the lease term.

Lease agreements, like any legal documents, include specific terminology. Most people don't understand it and that will most likely lead to disputes, later in the tenancy. Before you sign, make sure you understand what is in your offer to lease. Ask questions and negotiate. This way, you will avoid any future disagreements, disputes or even arbitration.

Commercial Lease Audit is the only way to avoid costly legal disputes and/or arbitration during the tenancy. We represent the tenant and its interest. We work with the landlord to obtain all the details necessary to ensure the tenant has been billed as per his/her lease terms. If we find errors we negotiate settlements with the landlord. Not lastly, we advise the tenant on a fair and favorable lease language based on accepted industry standards and our expertise.

Tenant arbitration costs can be minimized by promoting awareness of rights and obligations. Educating tenants on lease terms and responsibilities fosters a proactive approach, reducing the likelihood of disputes or their escalation and the associated expenses. Of course, this is even more effective when done early on, before a contract is signed. However, in case of a dispute, it is crucial to revisit the existing terms and understand available options for the best resolution possible.

In the last years, we found errors in more than 70% of the files we reviewed. The review consisted of landlord's statement and reconciliation of pass-through expenses to tenants. Doing a lease audit is an investment not an expense. If you wish to discuss or have questions, please contact us at maria.nenciu@richvaleconsulting.com for a free consultation.