Commercial Real Estate Investment/Plumbing dispute at restuarant.

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Question
Hi Jim! I hope you can give an opinion on my dilemma.  Our family owns a restuarant.  The drainage pipe under the floor had collapsed and is broken.  We cannot use the sinks in the kitchen because of water backing up due to the breakage. we feel that the landlord is responsible to fix it.  The landord says that we should fix it. in the lease agreement it says that the tenant is responsible to fix anything protruding out from the floors, walls and ceilings. So we are interpreting it would be something like a faucet not a busted drainage pipe under the flooring. The landord does not agree. The pipe itself is a "common line" meaning other neighboring tenants drainage goes through the same line. (although they are not restaurants) We had talk to the previous tenants of the space we are renting, and they said they had problems with drainage backing up from time to time. We feel that it had been a progressive problem before and during our lease, and the pipe had  finally broke during our term. In order to fix the busted pipe, the flooring has to be torn up. We feel that this is a structural issue and the landord is responsible.  Our lease is up and we are not renewing.  We did hire a lawyer and he believes its the landord responsibility. I'm just writing you to get a second opinion and if this is going to be a losing battle for us. I don't own the restaurant it belongs to my uncle.   thank you for your help.          
         Duane.

Answer
Duane:

Although a careful reading of your entire retail lease should reveal text that specifically addresses this matter and who is responsible for the repair, your comments suggest that the landlord is going to push you for the cost of the repair based on its interpretation of the germane lease provisions.  Without a copy of your lease to review, and without knowing of any specific lease language to the contrary, this problem is; as you noted, what is referred to as a "structural" flaw and usually a landlord responsibility.  

You say that others can verify that the breakage/blockage was known to the landlord before you moved in and during your lease.  Although I am not an attorney and cannot give any legal advice, if the potential cost to perform the disputed repair warrants, you may wish to have an attorney review this matter.  Your attorney may wish to discover if this might be a landlord "failure to reveal a material fact", a "latent defect", or other legal situation. However, the landlord might also advise your attorney of facts that make the matter even more ambiguous.    

The blockage and breakage of a drain can often be difficult to assign responsibility when a restaurant is involved.  Does your lease require your restaurant to have its own "clean outs" installed?  Can your landlord provide proof that it had the line cleared periodically in the past?   When the repair is made, the actual cause of the blockage or breakage may also reveal who/what is correctly responsible for this repair.  The "common line" arrangement is also likely to complicate resolution.

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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