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Question
The fire inspector has required us to replace the sprinklers in an industrial building. The tenant doesn't feel this is his responsibility. Is replacement the landlord's responsibility or the tenants?
Judy-
Unless there is no lease yet on this space, this should be very easy to resolve.
How does the lease between the landlord and tenant address this matter? If the lease doesn't specifically use the words "replacement of the sprinklers" it may refer to this task in a category of tasks or repair such as "fire control", "structural systems", "capital improvements", etc.
It may be even further disguised in provisions that may be titled or referred to as: "Services provided by the Landlord" where there will likely be text that says something like: "The landlord shall provide utilities, landscape services, .....etc., "and repairs to the structural systems of the property ...at it's sole expense....." and the text may continue on to say:"as long as the tenant pays the rental stipulated in paragraph ______ of the lease".
Another clue to the intentions of the lease is to look at the situation created by the lease. Does the lease describe who is responsible for similar things in the lease? Roof repairs? HVAC system repairs? etc.
If there is no lease yet on the premises, you can either resolve the question by finding if there is a standard way the matter is handled in similar warehouse leases in the area, or simply set the rent at a level that is sufficient to cover the cost of the sprinkler system. (You may find that the fire marshal can tell you how most warehouses allocate that cost because he is always around when it comes up).
You may be able to find a local board of realtors that are familiar with local practice in this matter, or be able to find a national association of Warehouse Owners, etc. that may offer insight in this regard. Even the sprinkler manufacturers probably have knowledge in this regard.
I am sorry, but I don't believe there are any definitive nationally accepted arrangements in this regard.
-Jim
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Answers by Expert:
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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