Commercial Real Estate Investment/Lease Measurement Innacuracy

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Expert: - 3/15/2010


Question
Jim

I'm currently in a Commercial Retail Lease which date(s) back to 1983

The lease states that the total rentable area is 4800 Sq ft, 1980 in the front, which  is considered a prime street level area, and 2820 in the rear - we currently pay $81.5 per sq ft in the front, and only $30.00 in the rear

It's come to my attention, some 17 years later, that the stated sq footage is incorrect - wouldn;t you know, a BOMA measurement has revealed, even with a gross up, that the front area is actually only 1514 sq ft

Do I have any legal recourse whatsoever, to have the rent re-adjusted, even as far back as 1983 with regard to what  believe is a gross overpayment of rent?

Thx so much
jc
Canada, Ontario

Answer
Jeff:

If you are correct about the measurements of your leased premises being so excessive for so many years, you should find a commercial lease lawyer known for having solid integrity as soon as possible.   Do not accept an attorney that is not a specialist in Landlord/Tenant law just because they are well known in the legal environment.   Arrange a meeting with the attorney and ask them to advise you regarding the identical question you have posed to me.

I believe you do have legal recourse, perhaps significant reimbursement is in order. It is impossible for me to advise you accurately without knowledge of the legal code in this regard in your geographic area.  I do not suggest that you attempt to manage this matter by talking with your landlord or its representatives on your own and trying to work out some sort of settlement on your own.  In this case, I believe trying to handle this particular matter on your own to save money would be penny wise, but pound foolish.    

Please take my advice, and identify a good attorney that you feel confident about his/her skill in commercial lease law.  If you don't know of such an attorney, contact the closest Bar Association and ask them for names of some appropriate attorneys you can contact.  

Make an appointment as soon as possible and take PHOTOCOPIES of all your commercial lease documents and related paperwork for your attorney to review.  Finally, be cautious and heed  your new attorney's advice.

Please keep me updated on how this matter proceeds, I want to be certain that you make the correct steps as you proceed.  

Good luck,

Jim

Commercial Real Estate Investment

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Jim Avancena, CPM

Expertise

Best qualified to answer questions that involve commercial leases, that is, basic issues as well as the often unexpected effects of the complexities and inter-relationships of the provisions a lease may contain, explain how seemingly innocuous text in your lease can have a major impact on a Tenant or Landlord and their business operations, and the common practices utilized in the industry. I can untangle most matters that may come up from the time a tenant begins searching for a office or store space and the lease acquisition process, concerns related to remodeling/improving the leased premises, moving-in, subletting or assigning the leased space, and a long list of problems that may come up during the lease term and even after a tenant moves out. I have practical experience with most property management issues and resolving landlord and tenant disputes - especially those involving what may appear to be overcharges assessed for additional lease charges like CAM costs, operating expense reimbursement, real estate taxes, utilities, construction improvements etc. Note that I am not an attorney and cannot provide legal advice.

Experience

Thirty 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 participate in organizations with continuing and specific time requirements.

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 full pages) feature story on January 13, 1993; titled "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 in Maryland and the District of Columbia.

Awards and Honors
The same plaques and honors that most others in my industry have earned. I have none that I consider especially meaningful.

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.

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