My first #10CREdays post is about the simple things. Real Estate is Easy. Details are hard.

My Commercial Real Estate brokerage firm spends most of its time working on behalf of small business (fewer than 100 employees) and “non-institutional investors” -  a person who owns a building, or ‘mebbe’ ten. 

Not only do I love working with people, instead of job titles but there is always so much for both of us to learn. I learn a bit about how their business operates and why they need their office or warehouse to flow in a certain way, and they learn a little bit more about real estate operations every time they sign a lease or buy a building. 

When it comes to LEASES, key note speakers’ careers have been *made* and authors have burned up the text book trail with titles like “Hot Button Lease Clauses.” (I went to that class). What does NNN really mean?  Who replaces the air-conditioning unit? And whose lease is it? In real estate circles, you always hear about Landlord Lease, Tenant Lease. What *are* they talking about?

Shortly, I will break down a 48 page lease and use it as a template for consideration, but today.  I have one simple note from an *Actual* on-going “Case Study.”

Know Your Lease Terms.

Tenants, Landlords, Brokers. Know your Lease Terms.

I am not talking about those lease clause terms that tell you who cleans the office and when or how many hours a day the air-conditioning in an office runs. I am talking about Dates.

Know the Time and Term of your Lease. Know when your lease renews.

Whether you must give written notice that you will renew or if it auto-renews. 

When people are running a business with 14 or 20 or 100 employees, they have a lot to think about. Product Delivery, Logistics, Payroll… So, the terms by which the company occupies real estate often gets lost. 

Assign at least two people in your office whether they are full-time or contract 1099’s to keep track of your lease dates. The most obvious two are the person who manages the head of the company and the person who is book keeping.

It may sound insane that a company doesn’t know when their lease expires, but it happens. This case in point went a little like this…

About a year and a half ago, the Landlord in this story was approached for the Tenant’s space by a Triple A credit rated tenant (this is a big deal). The Tenant had been late with rent more than once – rent arriving in the third or last week of the month a few times.  So the Landlord decided that this Tenant should move and he set about trying to get him out.  The initial lease term expired and so the Landlord worked on securing the Triple-A Tenant, but the Triple-A ultimately moved to a different part of the state.

Flash forward 14 months to today. The Tenant needed to add 50% more space, looked for space with my firm, found it and signed a lease because the Tenant believe, based on the Landlord trying to move them out, that the Tenant was month to month. Tenant told his Landlord that he signed a lease elsewhere and was moving. This same Landlord who had tried to give the Tenant the boot, produced a signed lease renewal that has 11 months left on it. Now the Tenant has two leases and two rent payments for 11 months. (We are, of course, working to solve the problem.)

Know your lease dates and remember, that if your Landlord tries to kick you out, don’t assume that they are in the right to do so or that you don’t have a lease in place. 

The Simple Things trip us up. As a broker, I track all my client’s dates and call them in advance of any renewal or lease rate increases. Unfortunately, this client didn’t work with us on the lease that has tripped him up.  So, I recommend to everyone, even if you work with me, have two people in your office keep track of your dates.