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: Jim, 5 months into a 60-month lease I discovered the space within a suite I rented is 522 sq. ft. approximately, not the 664 stated in my lease. The leasing agent says the building has a "BOMA load", which is not stated in the lease. BOMA loads, I have discovered, typically run 6% to 13%. If a BOMA load was used, unbeknownst to me, it is over 27%. I want my rent lowerd based on actual square footage. How do I proceed? Is the lease voidable?
ANSWER: Barbara-
This is a very common surprise for many tenants.
I will skip the historical explanations for this measurement misunderstanding, because it does not effect your specific situation, and a margin of 27% suggests that the leasing agent nor anyone else that is employed by, or under contract to, the landlord, at the least avoided a detailed discussion of this measurement.
Check your lease in any area of the text near the language stating you have 664 square feet of space, or portions that discuss the size of the suite, your share of the operating costs, the total measurement of the entire building, the "rentable" amount of square feet, the rental rate per square foot, etc. Usually, these subjects are located on the first or second page of the lease document.
What you are looking for is lease text that says something very dry and technical like: "Six Hundred and Sixty-Four Square Feet of space "AS MEASURED IN ACCORDANCE WITH A MODIFIED 1996 STANDARD METHOD OF MEASURING FLOOR AREA IN OFFICE BUILDINGS AS ADOPTED BY THE BUILDING OWNERS AND MANAGERS ASSOCIATION (ANSI/BOMA Z65.1-1996)", or something that could have less text that could say something like: "Six Hundred and Sixty-Four square feet of space INCLUDING A COMMON FACTOR", or even abbreviated like: "664 Square Feet allowing for circulation space". The point is, you are looking for text that seems to be related to the 664 sq. ft. total.
I think you will find that there is text somewhere in the lease that refers to the phantom space that you are concerned about. If you cannot identify such language, don't worry.
You can either schedule a meeting with your landlord to discuss this common "misunderstanding", (be certain to take a witness with you to the meeting), or send your landlord a certified letter being careful to carefully explain your concerns and indicate that you expect a response to your correspondence within ten days.
My guess is that if you meet with your landlord, the lease text does reference the additional "Load" somewhere in the text and you don't recognize it, and the landlord will point it out to you. Your landlord could also go through a "good cop - bad cop" routine where he chastises the leasing agent, and says the equivalent of: "Opps! I have told that leasing agent 100 times never to leave that language out of the lease, here, let me write that in for you here in the margin of your lease".
If you correspond with your landlord, the same result is likely, only in writing.
If your landlord does point out text in your lease that he suggests refers to the load factor, you need to be objective and see if the wording the landlord indicates seems like a reasonable man or woman would interpret it the same way as your landlord intends.
If your landlord says that the wording was left out of the lease, he has a problem.
Regardless, if you feel the landlord's text was ambiguous or if the wording was left out of the lease altogether, you must tell your landlord what you believe is a fair way to resolve this misunderstanding. 27% is a huge "Load" factor.
You need to determine how badly you want this particular space for your business. If your landlord detects that you really are attached to the space, working something "reasonable" out may be difficult. If you wish, you could hire an attorney knowledgeable in Landlord/Tenant Law, and after getting his opinion, proceed to court or whatever your attorney advises you.
If you had used a lease representative to get your lease, he/she would have caught this problem immediately when you started looking for space.
You might also check any lease drafts you read before the final copy was sent to you to sign to see if the initial drafts also had text included about the "load" factor. There should not have been any changes to the final lease execution copy that you signed from the earlier copies unless you were made aware of it.
Please send a follow up question if you need additional assistance.
Good luck.
-Jim
---------- FOLLOW-UP ----------
QUESTION: More a comment than a question, Jim. Your response is wonderful and so insightful I feel as if I just came from a consultation. I have combed my lease, held it up to the light and examined it with a magnifying glass. The only reference to my suite size is within a section called "Premises" and says: shall mean those certain premises located on the first floor of the Building known as Suite 102 comprised of approximately 664 rentable square feet as depicted on Exhibit A attached hereto. Thanks to you, Jim, I believe I understand my options. I simply want my rent reduced according to correct size with a corresponding addendum to the lease. I'll proceed carefully. I hope for cooperation to keep this out of the legal action arena. Thank you so much!
Answer Barbara-
The point is that there should have been a "meeting of the minds" as to what the terms of the lease were by both parties. If there was no indication IN WRITING in the lease that this additional "Load" square footage was being included and by inclusion bumping your rental up by 27% for five years, then it is unethical and predatory.
I won't comment on the legality of this matter, as I cannot give legal advice. Beware, I suspect that someone is going to say you were fully aware of this "Load" and that they told you all about it. As you can imagine, when someone is trying to lease space that includes a extremely hefty 27% "Load", it is very common to discover that they resort to "uncommon" practices to lease the overloaded space.
Be very cautious getting this resolved, if this is not simply an error by the landlord, entities that engage in this kind of practice have dealt with this situation face to face many times before and can be threatening when someone calls them out - especially when they know they have no defense.
There is a load of something related to this matter, but it isn't square feet.
