Expert: Jim Avancena, CPM - 10/29/2010

Question
Jim, I am a therapist and have a commerical NNN lease (i no-dumb move).my lease began in july 2008. the building owner was the manager but of recent have had two different property managers. Upon being explained the lease by each of them, the facts did not seem to add up. We currently pay for 4624 sq feet as outlined on our lease. rentable versus usable was not differntiated in the lease and now i know this makes a big difference as it leads to core factor and cam calculations. The previous PM sent an email that reported based on the orignial architech calcs that we have 3817 USF with a 15% core factor ( a big difference to what we are paying). After this email, she was dismissed as PM. The new PM sent us a letter stating that the information we had received was erroneous and in actuality we have 3384 USF with 4624 rentable square feet equating to a 27% core factor. When we figured it out and inquired we found that is actually a 37% core factor. we are obviously being misled! HELP!

Answer
Laura:

You have a problem that tenant's often discover AFTER they sign their lease.   Although it appears that you did not independently verify the "rentable" versus "leasable" measurements of your premises before you signed your lease, it matters little what the core factor actually is if you ultimately agreed that you lease  4,624 total square feet.   Your pro-rata share of CAM expenses isn't based on your core factor percentage - regardless of what that figure is.   Pro-rata share is calculated using your total agreed "rentable" square feet in relation to the total rentable square footage of the property.

I would be surprised if the text of your lease does not address the matter of how your premises are measured or how the amount of useable or rentable square feet is derived.   I think it may be that you are not aware of the industry expressions that relate to that measurement.

It seems that you were in the dark about the specifics of this matter and signed your lease anyway based on representations - likely verbal - by your landlord of what the "correct" measurements actually are.  

You have very little chance of resolving this technical issue on your own with your landlord since you lack the specialized understanding of this matter that the landlord has and will use to confound you further.  You should quickly identify a local attorney that specializes in Landlord/Tenant law and have them represent you in correcting what sounds to me to be "a material mistake of fact" contained in your lease.  This is NOT a complicated matter for an attorney that has a solid Landlord/Tenant legal background. If you cannot afford to hire an attorney, try to find an attorney via the local Bar Association or nearby law school that will assist you on a pro bono basis; that is, they don't charge you for their legal assistance.

DO THIS RIGHT AWAY!  This should not be a lengthy legal dispute (it might even be resolved with a phone call from a knowledgeable Landlord/Tenant attorney to your landlord) , however if you are paying for an excessive number of square feet, this error will cost you far too much in un-earned rent during your lease term.

Good luck.

-Jim