Commercial office vacancies have been on the rise in DC.
This increase occurred due to multiple reasons. Of course, the struggle of American small businesses due to COVID-19 is no secret, but landlords often struggle with lease enforcement as well. If you want to protect your rental investment, you need solid landlord lease guidelines.
Today, we'll help you develop more effective lease management and explain some lease enforcement best practices for commercial landlords. Keep reading and you'll have all of the lease agreement tips you need to properly manage your rentals.
Start With Tenant Screening
To make lease enforcement easier, you must screen your tenants carefully. Start by advertising your vacant units to the right types of tenants. If you do that, you'll get the right pool of applicants to sift through.
Commercial tenant screening is a bit more involved than residential screening. You need to look into the personal and financial background of the people running the business.
As for the business itself, you must look at the business plan and verify the company's existence with the state. It's also important to get a sense of the company's growth over time, which includes a credit check and more in-depth research into where it's come from and where it's headed.
Clarity in the Agreement
Once you've chosen the right tenant, you can further ease lease enforcement by writing a clear lease agreement. Your lease should clearly outline what's expected of your commercial tenant and what they should expect of you. It should also declare what will happen if the tenant breaks the lease.
Any ambiguity in your lease agreement makes you vulnerable to an opportunistic tenant. When writing yours, it's in your best interest to involve an experienced professional who understands the legality of these agreements.
Inspect Your Property
The two biggest reasons for commercial eviction are failure to pay rent and unforeseen property usage. Failure to pay rent usually signals that the business is falling apart financially. If they're using the property for something you didn't agree to, however, it's easier to conceal.
That's why it's so important to perform regular property inspections. This allows you to inspect the overall condition of the unit while looking for lease violations.
Consistency Is Key
If you spot lease violations, you should be able to turn to your lease agreement to determine the next steps. One of the most important aspects of lease enforcement is consistency.
Treat each violation with the same level of scrutiny. Follow the directives you've laid out in your lease agreement and issue penalties to your tenants accordingly.
Hire a Property Manager
Lease enforcement is one of the most tricky and uncomfortable aspects of being a commercial landlord. If you're finding yourself unfit for this role, you can always hire a property manager to help.
At PMI DC Metro, we're a top commercial property manager and part of the largest property management group in the country. We can help with property management enforcement, as well as things like tenant screening and property accounting. Contact us today to find out how our services can benefit your commercial rental in 2024.
