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Commercial Real Estate Investment/Rent overcharging/incorrect Sq footage question.

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Expert: - 1/19/2011


Question
Hi Jim. Three years ago I leased a commercial space in Washington state.

At the time of the negotiations (which were all via email, and I have those copies), the landlords agent/son told me the leased space was 1050 Sq Feet. We agreed at $21 per sq feet after a LOT of bargaining.

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However due to various other things going on in my life and my poor math, he slipped into the final lease without me noticing that the space was 1200 Sq Feet and therfore has been overcharging me all this time. I am also getting overcharged obviously o the NNN/CAM which is $5.76/sq foot.

In other words the initial rate should have been $21*1050 = $22,050 but he slipped into the lease that the monthly rate would be $2100 per month and therefore I have been paying $25,200 per year for the last three years now. ofocurse the NNN is on top of it. he also slipped into the lease 1200 Sq Feet. The lease contains a line that "variances in actual sq footage will not cause rent/NNN pmts to change).


Is there any legal recourse for me? This is total cheating and I am willing to go to court over this. All in all hes overcharged me already by over $12,000 in the last three years (i.e rent & NNN/CAM combined)

I have all the emails in original in which we plainly agreed that the space was only 1,050 Sq feet and the rate would be $21 per sq foot. This is so frustrating and so dishonest. Thanks so much.

Answer
Marcus:

Your dispute and the component legal issues involved are seen commonly in American courtrooms.
 
Unfortunately,you will need to retain an attorney that has experience with Landlord/Tenant ("L&T") legal cases to advise you based on the specific L & T law that is effective in your area.  Although I am not an attorney, and cannot provide legal advice, your attorney will be very interested in the kind and quality of the evidential material you have available to help him prove your case because it is critical to winning or losing.

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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