Commercial Real Estate Investment/ICE COLD RETAIL SPACE
Expert: Jim Avancena, CPM - 1/16/2010
QuestionQUESTION: Our lease states A/C & HEAT will be supplied during business hours, Mon - Fri 9:00AM - 6:00PM & SAT 9:00- 1:00. The landlord turns the heat off during non business hours and back on for business hours. Some mornings when the store opens the inside temperature is less than 50 degrees and may take in excess of three hours to reach 70 degrees. I have spoken to the rental office about our situation several times. They always reply we'll take care of this but nothing has changed. What are we entitled to? Our store has a stand alone heat & a/c which they control when it's operational. We have access to the thermostat.
ANSWER: Bruce:
If your lease does not specifically address how this situation should be handled between the landlord and tenant, you should send certified correspondence to the landlord indicating that you have contacted them several times regard his failure to provide appropriate minimum heat, and that you intend to hold the landlord liable for any business losses that you prove were a result of the landlord's failure to have the temperature at the lease stipulated temperature level - or at a "reasonable" temperature level - when the official operating hours commence and terminate each day.
Your landlord must be reasonable about how it handles unexpected climatic situations, and this winter's uncommon cold temperatures demand reasonable adjustment in HVAC procedure.
You said that you have your own stand alone heat and a/c system. Do you pay, or reimburse your landlord directly for electricity, natural gas, or heating oil consumption based on an individual electric meter, natural gas deliveries and bills, or oil bills consumed by your HVAC system serving your premises only? If so, why does the landlord refuse to commence HVAC operations earlier and later each business day?
You may also contact the local utility suppliers and ask them how other landlords have adjusted to the unusually cold temperatures this year. The utility companies often have valuable information in this regard.
Please send me a follow up question if I have not solved you problem, however, please provide me greater detail regarding the provisions of your lease that might be titled or address: HVAC, SERVICES PROVIDED BY THE LANDLORD, TENANT RESPONSIBILITIES, UTILITIES (especially regarding what utility bills you are responsible for paying directly or reimburse the landlord for), or other related provisions.
Good luck,
-Jim
---------- FOLLOW-UP ----------
QUESTION: Jim my landlord does not have a separate meter for my heat & A/C but he does pass thru all operating cost increases which means it costs him nothing to provide me with more heat or A/C. Yet he still make this a long drawn out process, resolving our issue with the heat. As to my lease it just states Heat or A/C shall be provided during our business hours Mon_ Fri 9;00AM-6:00PM & Sat 9:00AM-1:00PM. I'd like to receive an hour prior & post business hours, which I feel is the minimum needed to operate a business.
I wanted to answer your questions because I've asked them myself, my original question to you was vague. Since I posted my original question to you my situation has improved, not perfect but manageable.
Is there a minimum legal temperature he needs to provide?
Thank you Bruce
AnswerBruce:
Often a Landlord will leave certain provisions in your lease purposely vague to give them them flexibility to avoid having to spend any additional funds or to allow them to avoid liability for something. You will note that your lease is likely very specific about certain things, and ambiguous about others. For example, my guess is that your lease says if your monthly rent is not paid by the 5th of the month you will be required to pay a penalty. Note that the lease does not say something non-specific like "you cannot pay your rent late", it says something specific like "if you pay later than the 5th day of the month you will be fined $________".
Many times the text about heating and cooling will say something purposely vague like "the landlord will provide REASONABLE heat or cooling during the seasons of the year AS NECESSARY." The question then is what defines "reasonable" and "necessary" heat?
In the recession, very few businesses have any funds to cover unexpected costs like a colder than usual winter - this is likely true for the landlord and his utility charges even though he can be reimbursed for much of the increased costs later.
Consider if any of the following are feasible for you to consider:
1. Send me the heat and cooling related language VERBATIM so I can consider the text further, or, if possible, have your attorney review the wording of the same text and advise you if you have any reasonable options. Also, please tell me if your lease has a clause that provides that the tenant; upon request to the landlord, can pay an additional fee (often quoting a per hour cost for such "after hours" heat or cooling) for heating or cooling provided by the landlord before or after the hours stipulated as the business hours in your lease. This would be a very interesting aspect of your lease given your heating problem, and would help verify that your landlord has the capability to provide the heat you wish but does not choose to do so.
2. I have found that sometimes, although not always (it depends on the jurisdiction), if you file an action in the local landlord/tenant court or civil court a judge will issue a court order to the landlord to heat or cool your premises to X degrees by certain hours in the morning and maintain the heat at a specific level until a specific time in the evening. Again your attorney could advise you of it's advice in this regard.
Every legal jurisdiction will often have it's own specific Landlord & Tenant Code that states the over-riding laws(rules) that govern what a landlord's and tenant's legal responsibilities are in your area. Note that there may be separate Residential and Commercial Codes in your area or, there may be only one code for both that tells you what parts of the code applies to residential vs. commercial tenants. Usually you can find a complete copy of your own Landlord and Tenant Code on the Internet by simply entering "Landlord & Tenant Code - El Paso" (List your city, county, etc. here)" and the search will usually lead you right to the local area "code" or laws. If your area also offers you a "summary" of the local code, it is best to get the complete text instead.
The provisions of your local Landlord and Tenant Code supercede any provisions in your lease that conflict with your local code. So if your local code states somewhere in it's text that A landlord will provide adequate heat to it's tenants, you may have a strong case if you were to bring your problem to the local landlord tenant court. Again, you should ask a local attorney if they find this feasible.
3. Although it is no excuse, it may also cost your landlord more than you think to provide a reasonable amount of heat or cooling because the control equipment it has is antiquated and requires much manual or complicated adjustment of various equipment. Do you know anything about how many tenant units are provided heat and cooling by the same Heating, Ventilating, & Air Conditioning (Also known as "HVAC System") control system as you rely on? If it is more than just your space controlled by the equipment, it may be helpful to talk with the other tenants whose space is experiencing the same lack of effective early a.m. and evening heating and cooling. You can compare experiences that each of you are having with this problem - and compare what each of the various tenant's leases state in this regard - because it may provide information that will suggest what can be done to resolve the situation.
4. This may not be helpful because I do not know the specs on your HVAC service; however, you might consider having a private heating and cooling specialist come to your property and tell you if there is anything you can do (such as clean the filters or avoid circulating any cold outside air in the system until the heat reaches a certain temperature) to make the existing equipment function more effectively. This is only a possibility if a heating specialist has access to the heating equipment that provides the heat to your space. Most landlords have access to the HVAC equipment locked off so that no one can tamper with the equipment. If your lease says that it is the landlords responsibility to maintain the HVAC system at it's own cost, do not expect the landlord to reimburse you for the heating specialist charges even if the landlord should have done this itself.
5. If your business is in a shopping center, are there other vacant stores or office spaces available for lease? If there are many vacant spaces, this may hint at why the landlord is not starting the heat earlier in the morning - it is short on funds to pay its bills because it is not collecting enough rental income. If there are other vacant spaces for lease, your landlord may have problems leasing it's vacant space because the other tenants in the property are telling the prospective tenants that come to see the vacant space that the landlord won't heat the spaces enough and the new prospective tenant's are worried about considering leasing space in the project.
6. Your landlord may simply not care what problems it's tenant's are having with the lack of heat. If you have sent your landlord certified correspondence to the address listed in the "notice" provision of your lease (the local landlord & tenant code will also address and explain where a tenant must send correspondence to it's landlord ) and nothing is being done, then you may need to have an attorney review your lease terms and, if appropriate, contact your landlord on your behalf. If you don't have an attorney, or can't afford one, contact your closest Bar Association and ask them if any of their attorney's provide and "Pro Bono" legal services that would be at no cost, or reduced cost to you.
Again. Good luck with your heat problem. Send me more information or another follow-up question if I can help you further.
-Jim