Tenant Representation – Why You Need It!

Tenant representation is a value form of advocacy available to Commercial property Tenants. With Tenant representation provides commercial property management services that are specific to Tenants. This from of Tenant representation allows for proper management of Tenant benefits. Tenant representation allows for the the best interest of the Tenant to be the focus.

Historically the types of clients that make use of our tenant representative service are retail franchises and large professional services companies, more or less any operation that has multi-site property requirements that they lease. The reason they need and use professional Tenant representation and Tenant side property management to handle their property requirements is because they have a portfolio of leases with many sites in different locations. This means that a lack of proper commercial property management, negotiation and know how could result in property issues that are very hard to manage. Not to mention costly! When it comes to Tenant representation, costly does not just include financial loss, but also include the businesses ability to change and expand in the future. For example, a successful café owner that has managed to expand his business to cover a wide area with multiple sites had decided to choose the sites, preform his calculations, enter into a lease and launch the new store. However, after the first 6 sites realisation hit that he was not getting the maximum benefit from his investment in his leases. He found that he was dealing with his landlord’s property managers who did not understand his business operation. The cafe owner realised that he was constantly in battle with associated property cost calculations, maintenance needs and analysing the invoiced charges from the landlords property manager. Cafe Owner also found that when needed to further his business expansion, that he was restricted from taking many of the most lucrative and efficient routes by his existing leases.

Professional Tenant representation and advocacy service provides insight into the possibilities of what can be achieved through proper research and planning. Tenant representation also provides due diligence and negotiation of leases that are reflective of the best interest of the Tenant. With proper Tenant representation and research into the businesses goals, a benefit focused property and lease plan can be developed. Meaning that good Tenant representation and advocacy can be focused to mitigate any potential risks. Tenant representation also maximizes benefits, controls liabilities and provides flexibility with security.

When negotiating lease terms for new leases and breaking of leases a Tenant representative can be valuable as they are employed by the Tenant business and act in the best interest of the Tenant and not the landlord. Tenant representation is also very desirable when ensuring that a landlords agent or property manager acts in a fair and reasonable way. In many cases a landlords property manager acts in an unfair and mean way when dealing with tenants as their main goal is to benefit the landlord and ensure their fees are paid, they often do this in an aggressive and bullying way without looking into any concerns or situations that and given rise to any dispute situation. They seem on many occasions to rely on the tenant’s obligation to pay OPEX and rent therefore they demand payment without looking into any disputes. When a commercial tenant finds themselves in this situation and has received demand for payment after raising a concern about over charging, they usually decide to procure the services of a lawyer to defend them and their rights and explain/negotiate their position. However, professional tenant representation and property management services can offer a level of service that can help to avoid expensive legal fees. Tenant representation and property management services also offer strategic analysis and planning for the future. Administration of leases is an important factor in any commercial property situation and with proper analysis can often avoid break down in relationship between landlord and tenant. Tenant representation and property management can help see future problems and non-compliance of lease terms or incorrect OPEX charging by the landlord. Tenant representation will also ensure that the landlord fix their mistakes and keep to their part of the agreement.

In recent times we have seen that many commercial tenants have had problems of this nature due to the freeze of the economy due to the Covid-19 outbreak. We have seen businesses that have not been able to trade and therefore have not been able to pay their rent or OPEX. We also have seen landlords that have received a mortgage holiday from the landlords bank but the landlords commercial property manager have continued to demand payment from their tenants. This is sometimes due to the property management company needing to ensure that they receive their management fees, and often management fees are a percentage of the rent received. The knowledge of this landscape including the applicable laws is what benefits tenants by getting a Tenant representative or a professional property and lease consultant.