Landlords may require anywhere from one to three month’s security deposit from their commercial tenants if stated in the lease and agreed upon by the tenant. However, residential landlords are limited to a maximum of two month’s security deposit.

Commercial landlords may also require that the bank provides a letter of credit for those tenants who are not financially stable – or for those tenants who wish to have expensive modifications made to the rental premises.

Evicting residential tenants is very time consuming and difficult in some states. Before any legal action is taken, the landlord must first give the tenant a Written Notice to Quit which provides time for them to fix any problems.

It is not absolutely necessary for the landlord to give any written notice to commercial tenants before filing a lawsuit to evict them. However, it is recommended that tenants be provided with written notice and a chance to make changes in any existing problems to avoid legal issues.

It is always good business sense to consult your attorney before entering into any legal agreement with commercial or residential tenants or before attempting to make any changes in existing agreements.

Speaking in person to other tenants on the property is an important part of the screening process to determine satisfaction with the landlord’s performance regarding the following issues:

Is the landlord responsive to tenant concerns?
Are repairs to the premises done in a timely manner?
Is the building or shopping center well maintained?
Is the landlord accessible when needed?
Do other tenants consider the landlord fair and reasonable in business practices?

Three Qualified Properties is the optimal number to contact with a Request for Proposal (RFP) which should include request for a copy of the landlord’s Standard Form Lease agreement. This is sometimes referred to as the landlord’s “Wish List”. This form is subject to modification based upon their concept of the desirability of the tenant (size of organization, Fortune 500 credit, etc.), while the RFP is often thought of as the tenant’s “Wish List”.

At this point, the landlords will be aware that they are part of a competition and often, at least one will strongly express interest in completing the leasing transaction. Since we are currently experiencing a very strong tenant market with high vacancy rates, you as a tenant are now free to make requests for concessions that would not likely be available in a different marketplace.

Electricity, of course, and elevator service are to be expected. However, there are some services that may not be routinely provided during hours when the building is not operating. If you need security guards or maintenance at this time, if these services are available, the extra cost will be charged to you.

Commercial leases are usually prepared with up to four copies and each copy must be signed by you with your original signature. To be sure there is not an accidental substitution of pages, you should initial each and every one of these lease pages.

Tenants renting space in retail shopping centers or malls are usually required to pay a share of advertising fees. Serious consideration should be given as to requesting a limit on annual increases as this cost is part of the landlord’s operating budget and if the center is not doing well, you may be charged more than you can realistically afford to pay.

Requirements of the tenant for payment of repair and maintenance of the premises should be clearly set out in the lease. Commercial tenants renting space in office buildings are routinely responsible for the interior while the landlord is responsible for the exterior of the building and for common areas.

This month, you will not be able to make a full rent payment. Business is not bad enough for you to consider bankruptcy. What do you do?

Communicate with your landlord. Be honest about your financial situation and ask for modification in your rental payments. If you have been financially responsible, paid your rent and other obligations on time and are not considered “difficult”, your landlord will probably be willing to make concessions to keep you as a tenant especially if there are several vacant offices or stores on the property.

Some options you might suggest are a temporary reduction in rent for a short term – such as ninety days – in exchange for an early renewal of your lease. In some instances, landlords have been known to offer up to four months of free rent to keep their property occupied by a tenant who was previously financially stable.

You should be willing to provide financial statements to your landlord when requesting rent concessions to prove that your situation is really dire and that you are not merely attempting to take advantage of the economic downturn as some tenants have done. Bringing your records with you when initially asking for rent relief will likely go far to prove your sincerity.

Your real estate broker will likely make this suggestion to you since real estate costs are typically the largest line item expense and normally equate to some 25% to 40% of a corporation’s overall budget.

There are a number of clauses in a standard commercial lease that can be added or deleted by the landlord based upon the requests of a sophisticated tenant with the help of his or her attorney. In this economic climate where a great deal of square footage has become vacant in office and retail establishments, financially stable tenants are a desirable commodity and competition among landlords is fierce.

Consequently, a commercial tenant should take the time to plan and shop for an office or retail shop which will meet as many leasing needs as possible. (Landlords on your list of possible qualified properties should be aware that you are considering other options, which will increase the possibility of leasing concessions. )

A realistic analysis of space requirements is important with a view to company growth and increase in number of staff. Do the locations being considered have enough parking spaces for customers and staff? Are the building amenities and services in line with your organizational needs?

Your real estate broker can help you survey the market and prepare a list of qualified properties.

Now is the time for you to prepare – with input from your real estate broker – the RFPs including all of your needs and basic requirements which are more likely to be met by the landlord early in the negotiation process. These would cover such issues as possible expansion, renewal options, and corporate signs/building directory listing.

Also included in the RFP should be areas in which you are flexible and willing to yield. Sometimes called “throw away issues”, these are legitimate requests based upon what you as a tenant can expect in this current market condition. Part of the negotiating strategy should include asking for concessions which are not really necessary but because you can!

Comparably, a number of landlords have their own lease clauses which they are willing to amend or delete – based on how much you are wanted as a commercial tenant.

In order to document the negotiating process, the RFP should list specific points requested by the tenant with the landlord’s responses in the Word program. After points are accepted or rejected or modified by either or both parties, Comparative Lease Analysis software can be used to input basic information for up to five different leases. You and your real estate broker can review and evaluate financial information to help you make your final decision.

This is the time to consult your attorney before you and the landlord execute the lease – and then you are good to go.

With that said, there are a number of things you can do before you lease Dallas warehouse space that will help guide you in the right direction:

1. Make a concise list of exactly what your business needs to operate. Do you need a certain number of electrical outlets; a water source; or does your ceiling need to be a certain height? Many times, companies must find Dallas warehouse space that is kept at a certain temperature. The bottom line is that all of these things must be considered before deciding on Dallas warehouse space.

2. If you are using your Dallas warehouse space as a working warehouse, instead of simply a storage facility, you will need to deal with issues surrounding your employees, including adequate parking, adequate ventilation and adequate restroom facilities, for example.

3. Because most Dallas warehouse spaces are leased by the square foot, you will need to take the time to consider how much space you will realistically need.

4. Decide which location is best for your Dallas warehouse space. If you receive deliveries on a constant basis, make sure that you are in an easily reachable location. The amount of shipments you receive and the number of shipments you receive must both be considered before deciding on which Dallas warehouse space is right for you.

5. Ask other tenants in the building about the landlord and property management, and make sure that the services provided are adequate and up to safety codes.

6. Take the time to thoroughly read and understand the terms of your commercial lease. Many time, the terms used in commercial leases can be quite confusing, so don’t sign the lease until you fully understanding the terms of the lease. It’s also never a bad idea to have an attorney skilled in commercial leases read over your lease agreement before it is signed.

When examining your commercial lease agreement, pay close attention to the following areas of the commercial real estate lease to ensure that you have a firm grasp of any and all terms listed in the agreement:

• Lease term – This is essentially the length of the lease; where it begins, and where it ends, and whether there are any renewal options.

• Monthly rent – This section, of course, details your monthly rental obligations; however, it may also contain allowable increases (commonly referred to as escalations). Pay close attention to this section; in particular, how the landlord will figure out allowable increases.

Your monthly rent section will also detail whether your rent amount covers other items, such as insurance, property taxes and maintenance costs, or whether the landlord will charge you separately for these items. Generally, a “gross” lease is one that includes all fees and costs; while a “net” lease will include only the monthly rental payment.

• Security Deposit – This section will detail the security deposit amount for which you are responsible. More importantly, however, it will detail the conditions you must meet to see the return of your security deposit once the lease has ended.

• Rental Space – This section of the commercial real estate lease agreement will detail exactly what space you are renting and how the landlord has measured the space. Expect common areas, such as hallways, bathrooms and elevators, to be included in this space.

• Improvements, Modifications, Build Outs – If the landlord has agreed to make certain improvements or build outs to your space, this section will detail this. It will also include detailed information regarding what is being finished or improved, who will pay for them, and who will own them once the lease ends.

• Repair and Maintenance – This section of the lease will detail who is responsible for maintaining and repairing the commercial space.

• Sublet Options – This section of the lease will detail whether you may sublease the space to another tenant.