Commercial Real Estate Investment/Common Area Maintenance

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Expert: - 1/3/2011


Question
Hello,

My family owns a small business in a strip shopping center, and for the past 10 years they have been receiving a reimbursement from the audit in regards to the common area maintenance.  However, the strip mall was foreclosed on at the end of 2010 and now there is a new owner.  Is the previous owner, who still owns many strip malls still required to reimburse us money for 2010?  If so, which government office should I contact?  

Thank you,

Kathryn

Answer
Kathryn:

Beware of doing anything yet that will cause the new landlord to examine your lease terms closely.   If your lease does not specifically contain text that protects your occupancy through your lease terms when and if the property ownership changes hands, the new landlord may have the right to terminate your lease if it feels it might wish to attempt to re-lease your space to a tenant that might pay a higher rent.   You might wish to have an attorney review your lease terms before you contact the landlord.   Your attorney can advise you regarding the best actions to take given your lease terms and how the attorney believes the new owners' best investment plans will likely impact your lease interest.   I would do this right away and determine your best way to proceed.  Do not wait.

If your attorney feels it is OK after advising you regarding your lease terms and the current situation with the property owner, you should contact the new owner of the property in writing and ask that they advise you of the resolution of the common area maintenance expenses for calendar year 2010 and the reimbursements that you paid during calendar year 2010.

Only do this AFTER your legal counsel advises you regarding your lease terms as they effect the new landlord.


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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