We very often encounter situations when a tenant comes to us and says that the landlord:

• He was cheated at the conclusion of the contract and now he has to pay 2 times more than he “negotiated” at the conclusion of the lease
• Doesn’t return the security deposit.
• Won’t let him into the premises and won’t give the property back.
• Turns off the electricity.
• Makes me pay for some extra work.
• Refuses to accept early termination of the lease.
• Raised the rent by 50%.
• Constantly fines me for something.

These are the main problems a tenant suddenly encounters after signing a lease agreement. But, of course, it is far from complete. I often get the impression that many tenants have no sense of self-preservation. Even a spark of simple common sense is sometimes more than enough to avoid many problems. But no, why read the contract, it is just a formality! The main thing is to get the space and start the business as quickly as possible.

And when problems begin, the tenant makes round eyes and says, and I thought that …

You can think what you want, but the first thing to understand is that:

The contract is an agreement of mutual rights and obligations, not just a piece of paper that confirms your right to be in the room and need only the accounting department as the basis for the transfer of money.

Once the contract is signed, the parties can build their relationship solely on the basis of what is written in the lease agreement.

Take your time

Haste is only good if you are late for your flight. When you sign the document on the basis of which you will have to pay, you should never rush. No matter what your reasons for urgency are.

Not only that, but you could easily miss something important. The advice sounds trivial, but it is one of the main reasons for subsequent problems and losses!

Don’t rush to spend your money, don’t rush to sign a lease!

Don’t give in to pressure

The owner and dishonest realtor will foam at the mouth to convince you that they have a line of those wishing to rent the premises. Some of the suffering are even willing to pay 10, let’s not bother to pay 20% more than you. But the owner and the realtor, they are not like that! They only want to see you as a tenant!

Sound familiar? Doesn’t that sound like nonsense to you? The person is offered to pay 10-20% more, which is a lot of money for real estate, and they refuse. They don’t have anyone in mind, or they do, but they just can’t make up their minds. And this whole circus is just to get you to sign a lease as soon as possible. Oh, I forgot. Even can alternative offer (commercial offer) from another tenant to wave at the earliest conviction doubters.

Do not be fooled! That is, do not believe it. This market was last time in 2006-2007, when the room could actually be simultaneously up to 5 tenants. Now there is no such thing.

Do what you need to do, get the information you ask for, carefully prepare the contract.

Do not trust the landlord or his representatives

It is not that they will cheat you, because all landlords are like that. On the contrary, there are many decent people among them. And the representatives of owners – they are employees and will do what is beneficial to their employer. So don’t forget that the landlord has his goals and you have yours.

Case study: At the conclusion of the lease agreement, the parties agreed to install a promotional stele in the parking lot of the shopping center, but did not include it in the agreement on the grounds that the stele is outside the premises, so it must be a separate contract. And after signing the lease agreement the landlord, without refusing directly, delayed on various pretexts coordination of the placement of the stele.

So what? Contract for the premises is signed, the lease is dripping, and with the stele tenant himself to blame, no way to make a normal design, although he has already paid several hundred rubles for the development and numerous changes in the design.

Our advice is to make all the arrangements in the lease agreement.

Read the contract

Signing a contract without reading it is the height of folly. Do not step on the same rake, which borrowers constantly come across at the registration of loans in unscrupulous financial institutions, when they say the rate on the loan of 5% per annum, but after signing the contract it turns out that they have to pay more for insurance, processing credit, request the Bureau of Credit Information, printing and God knows what else, resulting in a rate rises in ten or hundred times!

Our advice – do not sign anything without reading.

Don’t rely on lawyers

You should not rely on lawyers to negotiate your lease. Keep in mind that there are very few good lawyers who specialize in real estate transactions. If your lawyer does not work with real estate, he will check the contract solely for compliance with its provisions of the Civil Code. And unless the contract says something exceptionally nonsensical like “the tenant must sit upside down in the unit,” they simply won’t pay attention if the provision doesn’t violate the Civil Code.

Case study. We specifically did a little test with a lease agreement that had this provision “The landlord has the right to increase the rent twice a year by no more than 50%.”

Result. Everything! The lawyers pointed out to the customer that you can’t increase the rent twice a year, but only 10% of the lawyers pointed out the likelihood of a significant increase in rent.

Why? Because for a lawyer, it’s not a legal issue, it’s a commercial one. The same goes for repairs, fire safety, access to the premises, etc., etc.

Don’t assume that a lawyer is a jack-of-all-trades.

Our advice is not to limit your contract review to a lawyer.

Involve specialists in negotiating the contract

Ideally, real estate managers who specialize in rental transactions and who will then work on the contract should negotiate:

• The point-of-sale director or other representative responsible for sales, especially if it’s a mall location.
• The operations engineer, the ahosh, the locksmith, the electrician. That is, someone who will then operate what you signed.
• A fire safety specialist. Especially when it comes to the placement of a large number of workplaces or rooms in which a large number of people are expected to stay.
• A structural engineer or contractor who will be building your point of sale, so they understand their capabilities and limitations.

Our advice is to involve specialized experts in the verification of the contract, especially if we are talking about large-scale investments.

Feel free to ask questions

If, of course, you have one. This advice echoes the previous one. When you read the contract, constantly ask yourself if everything is clear to you. Remember, the landlord is initially in a better position. He knows his space much better than you. So he will try to move all or part of the problems on you. Large owners, such as shopping malls, just hang all the costs on you, but the problems with the building will solve themselves. But the others may give you… er… a surprise.

Our advice is, if you don’t understand something, ask. Otherwise you’ll be paying for the cities water supply.

Don’t forget the appendices to the lease agreement

Many professionals who carefully study the text of the lease agreement itself, often just run their eyes over the appendices. I have even noticed this peculiarity for myself. Sometimes the most interesting things are contained there.

For some tenants, especially professional rentiers, the agreements themselves contain only general points, and the most important things are hidden in the appendices.

Advice – if you want to understand how to conclude a lease, read the appendices to the contract. Even if the landlord refuses to make changes to them under the pretext that they are the same for everyone, you will clearly understand what awaits you and make a reasonable and informed decision about the advisability of the lease.

Do not sign the lease for the premises first

Probably many people will criticize me now for blowing on water, because the practice of the tenant signing first is very common. It’s all true. I’m not going to argue. This is advice from the section of reinsurance. If the parties were going all the way to signing, then the landlord has no reason not to sign.

But in our practice, there have been cases where the tenant signed the contract and the Acceptance Act of the premises first and gave these documents to the landlord. Landlords due to various reasons, mainly because a more interesting potential tenant appeared on the horizon, did not sign the documents. When a new deal fell through, they would sign and demand payment from the tenant for all the time since the signing of the deed. Although in some cases, the period was up to a month. And once the landlord tried to demand a year’s rent even though the tenant never showed up at the premises.

Advice – try not to sign real estate leases first. Let the landlord do it.

Summary

• Take your time.
• Don’t give in to pressure.
• Don’t trust the landlord or his representatives
• Read the agreement.
• Don’t rely on a lawyer
• Involve specialists in contract negotiation
• Don’t hesitate to ask questions
• Don’t forget about the addendums to the lease
• Don’t sign the lease first

The post Concluding a Lease Agreement appeared first on Gazit-Globe.

Budget for office rent and renovation

The first thing to start with is to decide on a budget. In doing so, we recommend budgeting for the following types of expenses:

• Rent.
• Security deposit (equal to 1 to 6 months rent)
• Repairs.
• Furniture.
• Equipment
• Utilities

There may be additional charges for Class A and B offices:

• Maintenance costs for common parts of the office building.
• Parking.
• Security.
• Service charge.
• Insurance.

The term by which the office is planned to be rented.

Small offices of 200 – 1000 sq.m. can be found without any problems. There are quite a few of them on the market. Problems can arise with small offices, which may simply not be in the location that you have chosen to rent an office. Finding offices with a big area, from 5000 sq.m. may be more difficult, and suitable office space for big offices you have to wait sometimes for years. So we had to look for a suitable office for a large foreign company for almost 3 years, because the requirements for the office and the location were very strict.

So as soon as you start thinking about expanding, you need to immediately think about how to rent an office and look at what is on the market to find the right option at the time when the office will be needed. This will save you time and money. A lot of money, since you won’t have to make a suboptimal decision.

Office space for rent

Determine what kind of office you need: a workhorse or a showcase. You need to determine the list of characteristics that the future office must meet. Among them:

• Area. If you plan to expand in the near future, bookmark the square footage with an eye toward hiring additional staff. As an alternative, which will help to save money, consider offices with a lot of empty space or in the near future (1-3 years) may be the departure of one of the current tenants. Such an approach will allow to save money and not to rent unnecessary space.
• The condition of the premises. With repair or without it. Accordingly, from this directly depend on the cost of repairs and the timing of the move. Maybe where it will only be necessary to update the carpet and paint the walls, and somewhere to do almost a complete overhaul.
• Office space. The office should be comfortable and optimal for the tasks that it will perform. Decide right away you need an office system or open space. If the latter, then calculate how many offices you need, how many meeting rooms, rooms for printers, dressing rooms, warehouses, locker rooms, server rooms, etc. If you’re looking at a ready-made option, chances are that it will take significant resources to remodel the office to make all the fantasies come true. So, if there is a definite quandary in resources, try to fit in with the office landscape you already have.
• Parking. Nowadays it is difficult to imagine a decent office or business center without parking. But it is desirable to look not only on provision of the BC with parking spaces, but also on availability of parkings in the nearest district, since not all employees who come to work by cars will have the right and opportunity to leave their iron horse on the parking of the office center.
• Permit regime. In normal offices it is, but there are cases when you can get into the room only during working hours and on weekdays. For some people this is not a problem at all, and the owner saves significant resources on security.

Feedback on the office center and landlord

We highly recommend reading reviews on the Internet or talking to those tenants who already rent or have rented space in the business center you like. In particular we recommend finding out how the building and premises are maintained, how the relationship between the landlord and the tenants is, and how the landlord sticks to his contractual obligations. Believe me, you can learn a lot of interesting things that will change your intentions dramatically.

The post How to Rent an Office appeared first on Gazit-Globe.

Characteristics of the premises

How do tenants decide that a space is right for them and they are ready to take it on?

First they find a space that meets their requirements in terms of location and square footage. Well, and sometimes the price. Next, the tenant calls and asks a few clarifying questions about the space. The questions are usually of a general nature, but already at this stage landlords start to malfunction and break their sale because they can’t answer fairly trivial questions clearly and correctly.

The questions are simple, and the landlord can’t answer them. He pauses to find out and often doesn’t come back with an answer. Don’t believe me, ask the tenants.

But suppose the landlord did find out what the tenant asked him. He liked what he heard and makes an appointment with the landlord or his representative for a viewing. Here’s his chance to make the sale and tell him all the benefits of renting the space. There is a real interest, you need to do everything so that his still virtual interest is transformed into a real interest. Not only need to show the room, but also to tell him the benefits.

But no, what are the benefits. Landlord can not answer basic questions, no documents, some outdated plan, what the actual area he does not know, etc., etc. Instead of selling the premises for rent, just showing with the provision of sketchy information.

And the tenant sees not just one room, but several. And he has already formed a negative, if not in relation to the premises, then in relation to the lessor or his representative for sure. Therefore, if the next object is better to caress him, then emotionally he will be for that object. Believe me, I know what I’m talking about. It’s easier for a person to go with the flow than to put in the extra effort.

So don’t make it difficult for the tenant from the start. How to rent the premises easily? Help him create a positive image of your premises.

Building Characteristics

A tenant, especially if he has to look through dozens of ads, cannot always understand which building the space is in. For some types of business, the characteristics of the building may be crucial.

For example, stores selling fuel and lubricants cannot be located in residential buildings. Some restaurants, such as McDonald’s, which are in fact not restaurants, but factories, also cannot be located in residential buildings.

Characteristics of the location

The task is the same as in the previous two points – to gather as much useful information as possible to make the tenant want to locate his business here. A positive image of the premises is transformed into a need to rent such premises gradually and is made up of many building blocks. The problem of the landlord is that he does not know how many of these bricks are needed and what kind of bricks it consists of. So the more useful information you give the tenant, the better. A small detail can prove decisive in tilting the scales in favor of your premises.

Your client. Who is he?

The easiest thing to do at this stage is to screen out anyone who is not your client. These are the kinds of businesses to which you do not want to rent space or cannot by virtue of legal restrictions. So you screen them out right away, so as not to waste time on them.

In shopping malls may also be set limits on the number to accommodate certain types of businesses. For example, no more than two hair salons or no more than one grocery store.

If you’re a mall representative and you’re all booked up, I congratulate you. I’ll just give you one little piece of advice. At one time we were placing points of sale in the malls and the vast majority of the malls that couldn’t accommodate us didn’t even bother to take our contacts and put them in our database of potential tenants. And I was representing a very well-known brand in the market.

Is this really the right thing to do? We did exactly the opposite, all who were interested in the premises in our shopping center, we wrote down and put in our database. If a tenant left us or just planned to leave, we found a new one within a week. We did not waste time, the premises did not stand idle and we saved on commissions to realtors.

There can be certain nuances for the street retail premises. If the premises previously housed a bank or restaurant, it is worth starting the search for a new tenant with similar types of business. The new bank can save significantly on repairs if the premises were also formerly housed in the bank, but any other business will have to shell out a lot of money.

In general, determine who are not your customers. Then everyone else is yours.

The post How to Rent a Premises appeared first on Gazit-Globe.

We understand how to be prepared for such a situation in advance and what to do if the damage to the property has already been done.

Be prepared in advance.

Rent an apartment according to the contract. You should not treat the documents formally, sign a sample contract from the Internet, or neglect completing the act of handing-over the apartment – you can attach photos of the condition of the house, interior, furniture and appliances at the handover.

Write down all important for you terms right away. For example, you should inform about force majeure situations – flooding, plumbing and radiator failure immediately, you should report the breakage of household appliances within a week, no smoking is allowed in the apartment, pets are not allowed.

It is important to understand and fix in the contract the order of payment for repairs. It is clear that if you break a glass table, the person who broke it buys a new one. It is more complicated with plumbing and its wear and tear, the failure of moving elements of furniture, breakage of machinery. Write down and discuss these points in advance.

It is also important to reflect in the contract the amount of the deposit amount and the order of compensation, compensation, penalties, early termination.

If you have valuables in the apartment – an antique chest of drawers, a unique rug, or a porcelain set – you should get them out of the apartment before you rent it. Firstly the tenants are unlikely to appreciate the presence of such things. Secondly you will not have to worry about their safety.

Also try to discuss domestic issues in correspondence, not over the phone. Written evidence, documents and photos will help if you have to go to court.

The tenant has caused damage and is ready to negotiate

The easiest situation is if the tenant has told you about the problem and is ready to solve it. Here it is important for you to objectively assess the financial costs, agree them with the tenant and attract professionals to carry out repairs.

If you are interested in maintaining a good relationship with your tenant, and the situation does not seem critical, try to be diplomatic, avoid negative emotions, get a refund and solve the problem.

The problem is reported by neighbors

It will be great if you know your neighbors and exchange phone numbers. That way, when you rent your apartment, your neighbors can let you know about sudden problems, complain about noisy behavior or untidy treatment of the common area.

First situation – neighbors complain to you about tenants: noise, smells or cigarette smoke, garbage in the entryway

Remain calm. Yes, it is an unpleasant complaint, but it must be dealt with consistently, listening to both sides. Talk to your neighbors and be sure to apologize for the inconvenience. Next, calmly discuss the situation with your tenant.

Tell about the complaint of your neighbors, ask not to cause inconvenience to the neighbors and politely inform them that you will have to reconsider the terms of the lease or cancel the agreement if the complaints will be repeated.

Second situation – neighbors have caused damage: flooding, breaking the common door, breaking or damaging something in the entryway

Damage to a neighbor’s or common area property will require compensation for damages. If the case goes to court, most often such claims for damages are brought against the owner of the apartment.

To avoid ruining your relationship with your neighbors, you can compensate them for the losses according to supporting documents or make repairs. Next – deal with the tenant.

For example, if the flooding was the tenant’s fault – he forgot to close the faucet or did not inform you that the washing machine was leaking, then you have the right to claim damages from him, including through the courts.

If the cause of the accident is a broken pipe, internal failure of the plumbing and its natural wear and tear, the owner of the apartment is responsible for what happened.

An expert opinion on the causes of the accident is given by the emergency service, which eliminates the emergency situation. If you therefore understand that you cannot reach the apartment in time for the breakdown, ask your tenant and neighbors for an expert opinion on the spot.

Tenant ignores the terms of the agreement

The most common cases are the tenant getting a pet, not keeping order, smoking in the apartment. Also, the composition of tenants may not match the specified in the contract. For example, you rented the apartment to one person, and he shared the rent, reselling part of the apartment, or began to live with friends.

To fix the facts of the violation of the contract, you can take pictures and record on video violations, as well as invite a district police officer.

Then you can either negotiate with the tenants to terminate the contract, increase the rent, and pay compensation. Or you can go to court.

If you are afraid of such a situation, compensation and sanctions should be spelled out in the contract. You can terminate the contract in court, but in order to get compensation, you will most likely need to specify it in the contract.

The tenant has changed the locks

It happens that the tenant can’t pay the rent for the apartment, doesn’t want to let the owner in, and changes the locks of the entrance door. Such an action violates the owner’s rights.

To solve this problem, you will need a passport and a certificate of ownership. Next – the owner of the apartment should contact the Ministry of Emergency Situations, whose staff will help provide access to the premises. It is better that at the opening of the door attended by a district police officer.

Something is missing or broken in the apartment

The tenant may have thrown out furniture, broken appliances, damaged the walls or floor and not reported it. To fix the damage, you need to go back to the Acceptance Act, which describes what should be in the apartment and in what condition.

To save time and nerves it is better to try to agree on a compensation for damages – monetary compensation. If negotiations are unsuccessful, the owner can go to court.

When going to court, it will be good if the owner has photos of the interior, furniture, as well as in case of breakage of appliances – expert opinions on the causes of damage. It is obligatory to have a contract and an acceptance certificate for the apartment.

The tenants have made repairs or remodeling.

Because of the high cost, this is not the most common story. It is important to understand that the tenant without the written consent of the owner can not carry out major repairs or remodeling.

If this happens, there is administrative liability for unauthorized remodeling of the dwelling unit. The tenant is obligated to restore the apartment to its original condition.

If he refuses to do so voluntarily, the landlord can go to court to demand termination of the contract and compensation for damages. As in previous cases, it is important here that the original condition of the apartment is documented by photos and confirmed by the acceptance certificate of the apartment.

The post What to Do If Tenants Damage the Apartment appeared first on Gazit-Globe.

Repair for yourself

It is characterized by the following features:

• Durable – most often it is made with a reserve of several years
• Quality – in order to make the finishing and materials serve for a long time, solutions must be thought out and selected
• Individual – the needs and tastes of all family members are taken into account

Often more expensive materials are used for such repairs: parquet, natural stone, decorative plaster.

Furniture and appliances are bought of high quality and taking into account the individual needs of each current or future family member.

They add optional, but nice details: lighted cabinets and shelves, “smart home”. In the apartment for yourself any design solutions are appropriate. Here is possible bright finish, unusual accents, furniture of unusual shapes – everything that the owners like.

Renovation for long term rent

It is characterized by the following features:

• durable – if you are lucky, the tenants will live with you for more than one year, and the repair must withstand this
• Ergonomic – it should not take too much time or effort, and must meet all your living needs.
• Modern – so you have a better chance to rent your apartment quickly, and your tenants will feel more comfortable to live in it.

For such repairs, a neutral finish is suitable: white, light beige or light gray walls, white ceilings, natural-colored floors. Bright accents will be added by the tenants themselves.

The materials should be hard-wearing, easy to care for and not too expensive. Ideal are commercial laminate, linoleum, tile, PVC stretch ceilings. It is good if the materials and interior solutions leave tenants some freedom for creativity.

Furniture for apartments for long-term tenants usually buy solid and durable. It can be not very expensive, but it must be of high quality. Models and colors – basic, upholstery – vandal-proof. But you can also save money: buy only the most necessary – for example, the kitchen and cabinets.

Also buy a basic set of appliances – stove, oven, microwave, washing machine. Choose mid-priced models – they are more reliable and will last longer, while cheap ones will quickly run out of battery life. The dishwasher and air conditioner can increase the rent price.

All the above mentioned applies to the apartments, which will be rented for relatively small sums. The decoration and furnishing in expensive apartments for rent is closer to the “for yourself” option. Only in this case the style is neutral, like in the hotels.

Renovations for short-term rentals

It is characterized by the following features:

• functional – it is more important to have everything you need at hand than the external aesthetics of the space
• fast – it is great when the materials and solutions can update such a repair in a couple of days
• Wear-resistant – tenants will change frequently, which means that the materials must be chosen accordingly.

In this type of renovation, the apartment is finished with inexpensive materials. In the design are appropriate bright accents and solutions – they will highlight the apartment in the issuance of sites and help to find tenants faster.

In an apartment for short-term rentals, the number of beds is more important than storage space. You need beds, reclining sofas and chairs, and cot beds. And the rest of the furniture – for example, cabinets and chests of drawers can be saved, because tourists do not take a lot of things with them and do not lay them out. You can use covers for furniture – they are inexpensive, easy to care for and to replace if necessary. It is enough to equip the kitchen with the most necessary things.

You need only appliances that will help to comfortably spend one or more days – a microwave, a washing machine. But you can do without oven, dishwasher, water heater and air conditioner. A refrigerator with a large freezer is unlikely to be in demand, so choose a simpler model.

Make sure that the apartment has an ironing board, washing powder, a minimal set of towels, bed linen – in general everything that may be needed for a person who travels light.

In general, the repair of the apartment for rent is cheaper than for yourself. The difference is up to 50% of the cost of finishing, furniture, and appliances.

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