Office Building Management Agreement

If you hire a property manager, you should check the management contract carefully. You must ensure that you understand the responsibilities of the administrator, the responsibilities of the owner and make sure that you are protected if the administrator does not meet his obligations. Be careful with these estimates for another reason. They may contain a significant “safety factor” that unnecessarily increases your costs. Suppose your landlord pays $2.25 per square meter for electricity, but adds $2.75 per square meter to your base rent. A 10% increase in your rate would increase your fees to $3.02, and your landlord`s gain would increase from $50 to $55 per square metre. If your office were 10,000 square metres, that extra 5% would cost you $5,000 over 10 years. Your landlord`s profit on your electricity bill: 55,000 USD. And that assumes there will be no more increases. Barclays Bank in New York received a repair bill after its owner, the Panel Realty Company, installed a new air conditioner. Barclays refused to pay, and the case was tried. Barclays` lease required the owner to make all structural repairs. The bank was responsible for all other building maintenance and repair activities, including air conditioning repairs.

The court argued that replacing the system requires traditional conceptions of redress. This was an investment expenditure that Panel Realty was unable to pass on to Barclays. While the bank was winning, it had taken unnecessary risks because its lease did not make the lessor liable for capital expenditures.1 The indexation of the rent. As an alternative to a complex operating clause, some landlords lock up their rents. Thus, owners can keep their books privately. It also avoids a costly and time-consuming overhaul of expenses for tenants, which can lead to legitimate disagreements. Whatever you do, indicate the essential conditions of your extension option. Do not postpone the decision with a vague rental clause that “agrees to accept.” This invites costly litigation and could not leave you with office space.

For services considered extra, the agreement should clearly define how these obligations will be charged to you. Is it a flat fee, a percentage fee, or is the fee set on a case-by-case basis before the service is provided? The first thing to understand is that if you negotiate an office rental contract, your landlord probably has the advantage. If you are like most tenants, you negotiate a ten-year lease and you put the rent in the same category as other current business expenses that weigh on the monthly payment relative to your cash flow. Make sure the administrative agreement has a clear termination or revocation clause. It should indicate why and when the director or management company has the right to terminate the contract and when you, the lessor, have the right to terminate the contract. If the agreement requires the administrator to be liable for money on the basis of annual revenues, the owner is required to make that payment at the time of termination of the contract. The owner should read and check, recommended with the lawyer, their agreement with the property manager. In most standard contracts, a termination with a sufficient termination of thirty (30) days is allowed.

If this is not the case, the owner should look for other options to invalidate the contract. If your building has been operating for some time, the operating costs of the past 12 months are a good basis for estimating cost stoppages. Check the estimate with management companies that deal with similar buildings to determine if your stop is within the normal area. The experience of comparable buildings is also a good source if your building is new or if, for some reason, you do not have access to the cost history. maintenance. In a typical multi-storey office building, the owner is responsible for the repair of certain classified objects – usually building elements, d