AboutJim Avancena Expertise I am best qualified to answer any questions that involve commercial leases, the complexities and inter-relationships of the myriad provisions that a lease may contain, and explain how they commonly effect a landlord or tenant in their day-to-day business operation. I can explain most matters that will come up during of the full lease cycle from standard industry practices regarding the lease acquistion process, concerns related to remodeling/improving the leased premises, moving-in, subletting or assigning the leased space, and a long list of other problems that may come up during the lease term. I have practical experience with most property management issues and resolving landlord and tenant disputes. Note that I am not an attorney and cannot provide legal advice.
Experience Twenty-eight years active experience in the commercial real estate industry as a licensed real estate broker in the Washington DC Metro area(DC, Northern Virginia & Maryland). I have been admitted (approved) by the Maryland and DC courts to testify as an expert witness on the subjects of Commercial Leasing and Property Management in the area of standard industry practices. I have had a business for the last 14 years advising virtually every form of business entity from large national corporations to the smallest ma & pa new businesses regarding a wide range of commercial real estate matters in addition to property management and commercial leasing.
Organizations Currently my three children keep me so busy that it is difficult to find time to participate in organizations.
Publications I publish a local commercial real estate newsletter titled: "Tenants First". My firm was the subject of a high profile Washington Post business section cover page (2.25 page)feature story on January 13, 1993; "Overcharging Overhead".
Education/Credentials BA in Political Science from Memphis University, and five years of study in the real estate development summer program at MIT. I was certified as a commercial property manager (CPM-IREM), and currently hold a brokers license licensed in Maryland and the District of Columbia.
Awards and Honors Routine, the same plaques and honors that most others in my industry have earned, none that are significant.
Past/Present Clients Past clients include: The World Bank, George Washington University, National Association of Criminal Defense Attorneys, US Department of Commerce, The American Benefits Council, K-Mart Development, many law firms, a national union, other major organizations, and many, many small business firms and retail operators that I am most honored to serve. I estimate more than 1,500 firms/organizations.
Question QUESTION: i am trying to find out what is the standard fee to charge a tenant when they use utility beyond the regular hours of operations
thanks
ANSWER: Moshe-
There is no standard. The amount is usually whatever the actual expense is that is incurred by the landlord plus a modest administrative fee, however, that amount depends on how the electrical metering is arranged in your building and how large your building happens to be. I hope for your sake it is a small building.
If your building is arranged so that the metering measures electrical consumption based on a what is consumed on a floor by floor basis, the landlord can usually charge you much less than if there is only one meter that measures consumption for the entire building.
Understand that if one meter - the way most buildings were set up until recently - measures all the consumption in the building, the landlord has no way to stop consumption of power that is used by a "sleeping" building after hours.
The meter for the entire building will include the consumption for everything else that is using electricity after regular hours. That would be the lighting on the other floors (if anyone is working late or simply the building emergency lighting), the power consumed by one elevator set on standby (there has to be one elevator running afterhours), heaven forbid, don't forget the heating and a/c system (it uses electricity too) operates to maintain a certain temperature throughout the building. Even the power consumed in stand-by mode of all the other copiers and personal computing monitors will amount to some expense.
New,modern buildings will quite possibly have floor by floor electric metering, otherwise it is most likely that your building is metered in its entirety by one meter for all the above ground level office space. (It is unlikely that it includes retail spaces).
Note also that something called "time of use" pricing may come into play if the landlord is trying to be fair about the consumption, but it may be that he simply has established a after hours rate and tenants are simply required to pay the fee stated.
I have assumed that you know that there is electrical power available afterhours for your firm to use the lights and outlets in the same manner as you do during the work day hours. Air conditioning is the cause of you having to pay extra for afterhours power usually.
A major portion of the afterhours consumption comes from the landlord having to run the air conditioning equipment to cool your floor (even more if your building cannot limit cooling to just your floor and the entire building must be cooled!) If you are only using your offices for a few staff to work late for a week on a project, there is probably no need to ask for afterhours power unless it is very hot or cold (hot is what generates the expense) outside and the heating and a/c system will need to work very hard to maintain the office temperature at a comfortable level. If it not excessively hot outside and the standard operating hours for the building end at 7:00 p.m. in the evening, it will likely be 10:00 or 11:00 p.m. before you start to notice is is getting hot - if at all.
Send me a follow-up note about the reason why you need the power and/or the age, size and operations of the building, and I may be able to help you further in this regard.
Good luck.
-Jim
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QUESTION: basically, i am the landlord and our tenant specifically asked for extended hours, so i was trying to be as fair as possible to my tenant and find out what the fair fee would be, I guess you said its the cost plus some kind of a fee,
thanks allot for you r time, i would also like to ask you specifically if you are aware of the specific area we are referring to or you know some one in that area that can give some more input if there is any
we are in Schenectady new York
thanks again for your time
Moshe
Answer Moshe:
Sorry, I am not at all familiar with the Schenectady, N. Y. area.
I do not know how many extra hours your tenant is planning to work; i.e., is it a retail operation wanting to work everyday until 10:00 p.m. or simply a office tenant that wants to work 4 nights next week until midnight.
If you have only a single meter installed by the local utility company and it monitors the entire building you can do some things that are a bit involved; but if this is a common practice for your tenant, you may find them worth the effort.
The easiest thing to do would be to purchase and install - and I will let you decide who should pay for it - a electrical "survey-meter" or "sub-meter"; which are much cheaper now than they were only a few years ago, that are quite accurate and would do an excellent job of measuring exactly how many kilowatts have been used from one time to another. Depending how your building is wired, you may need to expend additional funds to be sure that the wiring going to the new tenant's submeter only supply power to the tenants' premises and do not include any unmarked wires that actually (for example) power exterior lighting for the parking garage or the neon sign that the ground floor Fed-Ex office all night, every night, etc. The point is that you need to isolate all the wiring to the tenants space from others for the building. This can be a modest to cost prohibitive electrical job, but obviously, extremely accurate!
You could also have a utility audit done where the tenant and your representative make a list of every single piece of equipment that will be operating in the particular space - including ceiling lighting, heating and cooling equipment serving the space,and everything else that will be in the space. You then estimate how many hours a day the equipment will be operating "afterhours", how many kilowatts per hour each piece of equipment consumes, multiply by an agreed to kilowatt hour charge, and estimate a fair charge that way.
I can also tell you that if your local utility company chooses to be helpful to you, they will have the specialist on staff that can tell you a vast amount about your buildings' consumption, historical consumption information, and the details of how to do whatever you want to do to solve your problem. Unfortunately, it is often simply a matter of if you get someone helpful and not overworked at the utility company at the time you call and wants to be helpful. I don't believe most staffers there are told to be accommodating. They will have specialized workers that could be of great help to you in this effort.
Finally, when I said a small administrative fee would be added to the extra charge for the afterhours fee in my first response, the fee would simply be a modest charge for the extra work that you or someone else in your operation would have to go to in computing the amount of consumption periodically and sending your tenant the invoice. Some landlord's have been known to abuse their power over the situation and make the administrative fee a profit center; a means of pressuring the tenant to pay a large fee in order to get the utilities they need!
You may be able to have the tenant simply agree to a lease addendum that says something like: "any additional charge or expense incurred by the landlord in providing electrical power to the tenant afterhours shall be billed to the tenant, provided the landlord does not include any expense that would be considered beyond the actual cost of providing the electrical service and fair administrative expense". I am not any attorney, so you will likely find someone with better language to employ, but I think to get the idea.
