Commercial Property Management Answer Book


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Price: $189.00

Commercial Property Management Answer Book is a question and answer book that provides information about the most common and most pressing issues facing managers of office building and retail centers.  

 

 

 

Written in plain English by our experts in commercial real estate,Commercial Property Management Answer Book is designed to help property managers and owners navigate through confusing compliance requirements, while managing a successful bottom line. It uses simple, straightforward language to provide quick and authoritative answers to questions concerning some of today's most pressing commercial property management issues.wide range of property management topics are addressed in an easily readable question-and-answer format, including: 
 

 
  • Leasing,
  • Attracting and retaining tenants,
  • Rent and rent collection,
  • Sublets and assignments,
  • Alterations and improvements,
  • Parking,
  • Marketing and building traffic,
  • Safety and security,
  • Dealing with employees.
  • And more!
Commercial Property Management Answer Book offers real-world strategies that can save managers and property owners money and time while increasing operating efficiency — making it a must-have in any commercial real estate professional's library.The detailed Table of Questions enables readers to locate the detail question area of immediate interest, and obtain the answer quickly.

TABLE OF CONTENTS
 

 

Preface 
Detailed Table of Questions
Chapter 1: Commercial Property Leases
Chapter 2: Attracting and Retaining Tenants
Chapter 3: Rent and Rent Collection
Chapter 4: Sublets and Assignments
Chapter 5: Alterations, Improvements, and Repairs
Chapter 6: Parking
Chapter 7: Marketing and Building Traffic
Chapter 8: Safety and Security
Chapter 9: Insurance and Liability
Chapter 10: Guaranties and Holdovers
Chapter 11: Management Company Employees
Glossary: Commercial Real Estate Terms

 

Commercial Property Management Answer Book offers real-world strategies and tactics that can save managers and property owners money and time while increasing operating efficiency, making it a must-have in any commercial real estate professional's library.
 

 

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If for any reason you're not satisfied with Commercial Property Management Answer Book, simply return the book within 30 days with the invoice marked "cancel" and owe nothing. If you've prepaid, you'll receive a prompt full refund, no questions asked.

 

With the purchase of this product, you agree to receive future annual editions at the pre-publication rate. Future editions will be shipped on a 30-day risk-free approval basis and you may cancel at any time by notifying Vendome Group.

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Detailed Table of Questions
 

 

Chapter 1: Commercial Property Leases
 

 

Commercial Leases—An Overview . . . . . . . . . . . . . . 3
Q: What is a commercial lease and how does it differ from a residential lease? . . . . . . . . . . 3
Q: In general, what are the key components of a commercial lease? . 3
Q: When drafting a lease, is it okay to use the terms "lessor" and "lessee" instead of "landlord" and "tenant"? . 3
Q: Is there a risk in asking a tenant to sign a redlined copy instead of having the tenant sign a "clean copy" of the lease? . . 4
Q: In addition to the tenant's space, many leases include additional rent charges for maintaining common areas. What is a common area? . . 4

 

 

Definition of Vanilla Box . . . 4
Q: What does the term "vanilla box" mean? . . . . 4
Q: Does excluding a definition of vanilla box from a lease afford a commercial property owner more flexibility in what it must provide? . . . . . . . 5
Q: How can the lease include a definition of vanilla box that is beneficial to the owner? . . . . 5
Q: Does the term vanilla box mean the same thing as "as is"? . 5

 

 

Memorandum of Lease . . . . . . . . . . . . 6
Q: What is a memorandum of lease? . . 6
Q: While recording a memorandum of lease benefits the tenant, can it cause problems for the property owner? . . 6
Q: Are there certain conditions under which it would be okay for a property owner to sign a memorandum of lease? . 6
Q: If an owner is required to record a memorandum of lease, should he just record the actual lease? . 7
Q: How much information should be included on the memorandum of lease? . . 7
Q: Who should pay for recording the memorandum of lease—the commercial property owner or the tenant? . 8
Q: If the lease terms change over time, will the memorandum of lease need to reflect those changes? . 8

 

 

Termination Notice of Memorandum of Lease . . 9
Q: When the tenant's lease ends, will the property owner have to file a notice terminating the memorandum of lease? . . 9
Q: What if the lease is terminated because the tenant violated it? . 9
Q: How can an owner avoid this problem? . . 9
Q: Should the notice of termination be brief, like the memorandum of lease? . . 9

 

 

Lease Document Management . . . . 10
Q: How can a commercial property manager keep track of documents so he knows all of his lease rights and responsibilities—and those of his tenants? . 10

 

 

Riders . . . . 12
Q: When should a rider be used? . . 12
Q: Does having a rider help a commercial property manager with lease enforcement issues? . . . 12

 

 

Eviction . . . . 14
Q: A commercial property owner has a "problem tenant."
Can the owner successfully evict the tenant? . 14
Q: Are there any other ways in which an eviction can be derailed? . . 14

 

 

Prepare for a Successful Eviction . . 15
Q: What questions will an attorney typically ask to prepare for a successful eviction? . . . . . . . . . 15
Q: Is there any additional information that the attorney will need? . 16

 

 

Sale of Evicted Tenants' Personal Property . . 17
Q: If a court issues an eviction order for tenants that had failed to pay rent, and the owner forcibly removes them from their space, does the owner have the right to sell their personal property? . . . . . . . . . . . . . 17

 

 

Self-Help Eviction . . . . 18
Q: Suppose an owner needs to evict a tenant, but suing for eviction would be too time-consuming and expensive.
Q:Is there a quicker way to evict the tenant? . . 18
Q: Which states allow self-help evictions? . . 18
Q: Will tenants agree to a self-help eviction right? . 19

Q: When can an owner exercise its self-help eviction right? . 19
Q: How can the owner take possession of the tenant's space peaceably? . . . 19
Q: What should be done with the tenant's property? . 20
Q: Is it a good idea to notify the tenant about the self-help eviction? . . . . . . . . 20
Q: Many attorneys do not advise their owner-clients to use self-help evictions to get back space when a tenant defaults. Why is that? . . . . 22

 

 

Lease Termination Agreement . . . . . . 22
Q: On the other hand, what should the owner do if a tenant has a hard time making ends meet and wants to terminate the lease early? . . . . . . . . . . . . 22

 

 

Lease Termination Agreement: Key Protections . . . 23
Q: What are the key protections that should be covered in the lease termination agreement? . . . 23
Q: If a tenant asks to terminate its lease, should the tenant be required to pay a termination fee? . . . 24
Q: On what should the new lease termination date be conditional? . 24
Q: Is it important to set an exact time for the lease obligations to end? . . . . . . . . . . . . . 25
Q: Should the tenant be required to pay rent until the lease ends? . 25
Q: What if an owner gave the tenant special rights or options in the lease, for example a right of first refusal? . . . . . . . . . . . . . . . . . . . . . . 26
Q: If the tenant leaves behind furniture, fixtures, and equipment, and the property owner has the right to keep those items, can he then sell those items and pocket the money? . . . 26
Q: Why is it important to keep the lease termination agreement confidential? . . . . . 26

 

 

Lease Termination Agreement: Final Steps Before Signing . . . 27
Q: Are there additional steps the property owner should take before signing the lease termination agreement? . . 27

 

 

Tenant Abandonment . . . 28
Q: A tenant moves out and stops paying rent before the lease ends. The owner or manager takes the tenant to court for violating the lease, but the court gives the owner much less than it asked for in damages. How could this happen? . . 28
Q: What are "reasonable efforts"? . . . 28
Q: Should the owner try to increase the rent for a prospective tenant way above the previous tenant's rent? . 30

 

 

Lease Enforcement . . . . . 30
Q: A typical lease has numerous key dates and deadlines. What are the ramifications if the property manager fails to keep track of these dates and clauses? . . 30
Q: Does this mean that the property manager should not only track the dates and deadlines that relate to its rights and obligations, but track those that relate to the tenant's rights and obligations? . . . . . 31
Q: What are the important key dates and deadlines that property managers should track? . . . 31
Q: Are there other option deadlines that should be tracked as well? . 32
Q: Some tracking dates are fixed or stated in the lease, such as the date the lease was signed. Are there other dates that the manager will need to determine? . . 33

 

 

Chronic Lease Violators . . . . . . 33
Q: Is there anything the manager can do to discourage chronic lease violators from violating their leases in the future? . . 33
Q: What are the standard lease clauses that an owner can use to protect itself against a chronic lease violator? . . . 34
Q: Is there any other action the owner or manager can take against a chronic lease violator? . . . 35
Q: Can the tenant successfully argue that the owner had waived or given up its right to evict the tenant for the late rent payment because it had accepted other late payments without objection? . . 36
Q: What should be in the letter so that the owner can avoid waiver? . 36

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Chapter 2: Attracting and Retaining Tenants

Attracting Tenants . . . . . 41
Q: What should the leasing staff know if they are to be effective in persuading prospects to lease space? . . 41
Q: Some leasing agents use cold calls as a way to attract prospects to a center or building. Are there any pitfalls in using cold calling? . . . . . . . 42
Q: How can a property owner or manager maximize the effectiveness of their leasing agents' cold calls? . 42

 

 

Demographics . . . . . . . 43
Q: Why is it important for an owner's leasing staff to always mention a center or building's demographics when pitching the center or building to prospective tenants? .. . . . . . 43
Q: What type of demographic information should the owner have and who should gather it? . . 43
Q: Who should compile the demographics and prepare the report? . 44
Q: Once the leasing staff has these demographics, how does the staff use it to the center's advantage? . 44
Q: What is the other strategy? . . 45
Q: Should the owner or marketing staff prepare comparative demographics for every prospective tenant? . 45

 

 

Tenant Retention . . . . . 45
Q: What are the benefits of surveying a center's or building's tenants? . . . . . . . . . . . . . . . . . . 45

 

 

Tenant Surveys . . . . . . . 46
Q: Who should conduct the tenant survey? . 46
Q: How often should tenant surveys be conducted? . 47
Q: What type of survey should the manager use? . . 47
Q: How long should the survey be? . . . . 48
Q: What should be asked in the survey? . 48
Q: Who should the survey be given to? . . 49
Q: How much time should be given to complete and return the survey? . . . . . . . . . . . . 49
Q: Should tenants identify themselves on the survey? . . . 49
Q: Once the tenant survey results are in, why is it essential to act on them immediately? . . . 49 

 

 

Lease Renewal Reminder Letter . . . 50
Q: What can an owner or property manager do if a good tenant fails to exercise its renewal option by the lease deadline? . . . . . . . . . . . 50
Q: What are the benefits of sending a tenant a reminder letter? . . 51
Q: What should the reminder letter say and when should it be sent? . 51

 

 

Assisting Struggling Tenants . . . . . . . 52
Q: Is there a way to monitor a tenant's financial health, spot problems that may be looming on the horizon, and take the necessary steps to avoid or minimize the impact of those problems on a center or office building? . 52

 

 

Rent Relief . . . 53
Q: When a tenant is struggling financially and is having problems paying rent, is it a good idea to offer that tenant some rent relief? . . . . 53
Q: What are the different types of rent relief an owner can give a tenant? . . . . . 53
Q: What should be in the rent relief agreement so that the tenant cannot abuse this concession? . . 54
Q: Under what circumstances should the owner get the right to terminate the rent relief agreement? . . 54
Q: Under what conditions would an owner want a rent relief agreement to terminate automatically? . . . 55
Q: If the rent relief agreement is terminated, how can the owner immediately collect any deferred rent payments? . 55

 

 

Blend-and-Extend Deals . . . . . 57
Q: What is a blend-and-extend deal? . . 57
Q: Which tenants are the best candidates for blend-andextend deals? . . . 57
Q: Will tenants make any demands before they are willing to commit to a long-term extension of their lease? . 57
Q: If a tenant and owner agree to a blend-and-extend arrangement, should the owner draft a new lease? . . . 58

 

 

Relocating Tenant or Downsizing Space . . . 59
Q: In addition to a rent break or a blend-and-extend amendment, is there something else a property manager can do to help retain a good tenant who may be in some financial difficulty? . . 59
Q: When is relocating or downsizing a tenant appropriate? . . . 59
Q: What should a property owner take into consideration before downsizing a tenant's current space—that is, breaking up the space into two separate, smaller spaces? . 60

 

 

Diversifying the Tenant Base . . . . . . . . . . . . . . . 61
Q: Suppose an owner of an office building with ground-floor retail space wants to lease out its space. How should it decide which type of tenant would make a good fit for the building? . 61

 

 

Mixed-Use Buildings . . . . 62
Q: Owning or managing a mixed-use property has its advantages. But, is there a downside that should be considered? . 62
Q: What are some of the major issues when dealing with a mixed-use building? . . . . 62
Q: What about other factors, such as noise or odors? . 63
Q: How does collecting rent from a retail tenant differ from collecting rent from residents? . . . 63

 

 

Leasing to Federal Agencies . . . 64
Q: Having the government as a tenant has its advantages, but is there a downside? . . . . . . . . . . . . . . . 64
Q: What process does the GSA use when securing space for federal agencies? . . . . . . . . 64
Q: Leasing space to a federal agency can be lucrative, but what are the negatives? . . . 64
Q: Are there special factors to consider when negotiating rent with the GSA? . . . . . . . . . . . . 65
Q: What about the impact on other tenants? . . 66

 

 

Leasing to Fitness Clubs . . . . . . . . 66
Q: Adding a fitness club to a shopping center or office building can attract tenants and sets a commercial property apart from the competition. Despite these pluses, are there any drawbacks to having a fitness club as a tenant? . . . 66
Q: Are there any build-out issues that the commercial property owner needs to consider? . . 67
Q: Do fitness club tenants make more noise than other tenants? . 67
Q: Could a fitness club's hours of operation pose a problem? . 68

 

 

Medical Office Tenants . . . . . . . . . 69
Q: Medical office leasing is a hot market, but leasing to medical office tenants brings certain environmental risks. Is there any way to avoid this from happening? . . . 69
Q: Before negotiating those issues, shouldn't the owner find out whether the space is already contaminated? . . 69
Q: What are the key cleanup responsibility issues that the owner should negotiate with a prospective medical office tenant? . 69
Q: What financial protections should the owner negotiate? . . . 70
Q: Are there any actions a property owner can take against a medical office tenant that does not meet its assessment and cleanup responsibilities? . . . . . 70

 

 

Temporary Tenants . . . . . . . . . . . . 71
Q: Is there a downside to allowing kiosks in a center? . 71
Q: If an owner decides it wants to bring temporary tenants into its center, where are the best places to find them? . . 71

 

 

Kiosk Agreements . . . . . . . . 72
Q: Once an owner finds temporary tenants for its center, should it set up agreements with these tenants or can it use a standard commercial lease? . . . . . 72

 

 

Rules for Temporary Tenants . . . . . . . 73
Q: Can a commercial property manager make sure temporary tenants run their businesses professionally? . . 73
Q: What exactly are these rules? . . . . 73

 

 

Nonprofits . . . . . . . . . . . . 76
Q: Are there any special benefits to letting a local charitable or nonprofit organization temporarily use vacant space in a center to collect donations, sell or distribute merchandise, or give out information about their programs? . 76
Q: Is it better for an owner to sign a license agreement or a short-term lease with a charity or nonprofit organization that it is temporarily giving space to? . . . . 76
Q: Are there any safeguards the owner should be aware of when licensing or renting space to a charity or nonprofit? . . 77
Q: When should the property manager let the center's other tenants know that it has lined up a charity or nonprofit? . . 77

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Chapter 3: Rent and Rent Collection

Overview . . . . . . . . . . . . . . . 81
Q: What is base rent? . . . . . 81
Q: Lease forms also include what is termed "additional rent."

 

 

How does it differ from base rent? . . 81
Q: What are CAM costs? . . . . . . . . . . . . . . 81
Q: If a building owner wants to replace a few things to make the building more attractive to new tenants, can the owner pass on some of those expenses as CAM costs? . 81

 

 

On-Time Rent Payments . . . . . . . . . 82
Q: If a tenant's rent is due on the first of every month, but on one month, the first falls on a Sunday, can the tenant wait until Monday to pay its rent? . . . 82
Q: If a pattern of late rent payments goes on for too long, the owner may lose its right to demand on-time payments or to evict the tenant for paying its rent late—despite what the lease says. Is there a way for the owner to re-establish its right to on-time payments? . . . . . 82

 

 

Notification Letter . . . . . 83
Q: What should the rent notification letter include? . . . 83
Q: Suppose the owner sends the letter, but the tenant still fails to pay its rent on time? . . . 83
Q: What if a tenant pays its rent during the lease's "grace period." Are such payments considered late? And, by accepting them, is the owner waiving its right to demand on-time payments? . . 84

 

 

Other Owner Actions: Draw Down Security Deposit .... 85
Q: Are there other actions that a commercial property owner/ manager could take to get a tenant to pay overdue rent (or other monetary obligations, such as CAM costs or taxes)? . 85
Q: What if the lease says an Event of Default must occur before the security deposit can be drawn down? . 85
Q: What if the lease says there must be a breach before the deposit can be drawn down? . . 86
Q: Why is it important to include a replenishment clause in the lease? . . . . . . . . . . . . . . . . . . 86

 

 

Draw on Letter of Credit . . . . 87
Q: If the landlord cannot draw down the rent due from the security deposit, can it draw from the tenant's letter of credit (LOC)? . . 87

 

 

Pay-Out Agreement . . 89
Q: What is a pay-out agreement? . . . 89
Q: Some property managers think it is okay to have an oral pay-out agreement. What can go wrong if the pay-out agreement isn't in writing? . . 89
Q: What are the key points that should be included in a pay-out agreement? . . . . . . . . . . . . 89
Q: What does it mean if a building or center is in a state that permits what attorneys call a "confession of judgment"? . . 93

 

 

Rent Review . . . 94
Q: Suppose a tenant signs a lease when the market was strong, but is now arguing its rent is unrealistic and wants to negotiate its lease terms. Should the property manager or owner renegotiate? . . . 94
Q: How does a rent review work? . . . . 94
Q: What should the rent review amendment say? . . 94
Q: What are some typical trigger events? . 95
Q: Using the methods above, how would the rent increase be calculated? . . . . 95

 

 

Percentage Rent . . . . . . . . 97
Q: How can a property manager get all the necessary information to determine percentage rent? . . 97
Q: Tenant mistakes on exclusions and deductions are common. What are some of the most common ones? . . 97
Q: How often should the tenant submit its gross sales report to the property manager? . . . 97
Q: What should the property manager look for? . 97
Q: How can a property manager ensure that a tenant will properly complete the gross sales report form? . . 98

 

 

Percentage Rent Records . . . . . . . 99
Q: Suppose a shopping center has smaller, less-sophisticated tenants, who are not as meticulous about their recordkeeping.

 

 

What types of problems can arise? . . 99
Q: What records should these small tenants keep for percentage rent purposes? . . 100

 

 

Slotting and Placement Fees . . . . 100
Q: Should slotting or placement fees be included in the tenant's percentage rent calculations? . . 100
Q: How can the property owner ensure the tenant is including slotting or placement fees in its gross sales? . 101
Q: Not every tenant collects slotting or placement fees. How can a property manager find out whether a particular tenant is? . . . 101
Q: Suppose the slotting or placement fees are paid to the tenant's corporate office and not allocated to the individual stores . . . 101

 

 

How easy is it to get the tenant to include the fees in its gross sales? . . . . . . . . . 102
Q: What if the tenant is collecting slotting or placement fees and the property manager believes the lease requires such fees to be included in the tenant's gross sales? . . . 102

 

 

Catering Fees . . . . . . . 102
Q: What about restaurants that offer onsite and offsite catering services. Should those tenants be required to include catering fees in their gross sales for the purpose of calculating percentage rent? . . . . . . 102
Q: In what ways would the process for calculating the gross rent and percentage rent differ from a regular store tenant? . 103
Q: What can a property manager do if it suspects that the tenant is not including catering fees in its gross sales or is doing so improperly? . . . . . 103

 

 

Internet Sales . . . . . 104
Q: Some retailers allow shoppers to buy merchandise online from the Web sites and to pick it up from a nearby store. If a store allows shoppers to pick up and pay for merchandise in this manner, should these sales be included in the store's gross sales? . . . . 104
Q: What should the property manager do if it suspects that a tenant is improperly excluding Internet order/in-store pickup sales from its gross sales? . . 104

 

 

Percentage Rent Audits . . 105
Q: Although the leases with a center's tenants may give the property manager the right to audit the gross sales on which the tenants base their percentage rent, how often should the manager exercise that audit right? . . . 105
Q: Are there any warning signs that property managers should look for? . . . . . 106
Q: Audit notices often trigger negative relations between landlords and tenants. What can a property manager do to soften the blow? . . . . . . . 107
Q: What should the audit notification include? . 107

 

 

CAM Costs . . . 108
Q: The owner of an office building plans on switching from pro rata CAM costs to a fixed CAM cost system. How can the owner convince its prospective tenants to accept the new fixed CAM leases? . . . . 108

 

 

Fixed v. Pro Rata CAM Costs . . . . 108
Q: What is the difference between fixed CAM costs and pro rata CAM costs? . . . . 108
Q: Do fixed CAM costs offer any major benefits to tenants? . 108
Q: What if a tenant is okay with signing a fixed CAM lease, but only on the condition it can audit the center's/building's books and records and see the actual CAM costs? . . 109
Q: Some tenants may express concern that fixed CAM costs can lead to a deterioration of services. How should the property manager respond? . . . . 109
Q: What is an "escalator"? . . . . . . . . 110

 

 

Auditing Operating Expenses . .. . . . . . 110
Q: If a tenant asks a landlord if it can audit a center's/building's operating expense, does the landlord have to agree to this request or can it refuse? . . . .110
Q: Under what circumstances can an owner refuse a tenant's audit request? . . . . . . . . . .110
Q: Is there a deadline for when a tenant can request an audit? . . .111
Q: Can the tenant use an auditor who gets paid a contingency fee? . .111
Q: Should the tenant who requests the audit be asked to sign a confidentiality agreement? What if the tenant refuses? . 112
Q: Can the property owner deny a tenant's audit request if there is no reason given for the audit? . . . 112
Q: Will the tenant have to pay any or all of the audit fees? . 112

 

 

Chapter 4: Sublets and Assignments

 

 

Overview . . . . . . 115
Q: What is an assignment? . . . . . 115
Q: How does an assignment differ from a sublet? . . 115
Q: Can a tenant assign or sublet its space at will? . 115
Q: Suppose a tenant approaches a property owner for permission to sublet, and the property owner tries to exchange its consent for an expanded lease with higher rent. Can the owner legally refuse? .. . 115
Q: What are the legal consequences if a property owner arbitrarily refuses to give consent to a tenant to assign its lease? . . .116
Q: If a tenant asks the property owner or manager to prescreen a subtenant before the two parties negotiate a sublease, is it okay to do so? Or should the owner wait for a formal request? . . . .116
Q: Why would a tenant ask the owner to prescreen a proposed subtenant? . . . . . 117
Q: If an assignor files for bankruptcy, can the property owner terminate the assignee's lease, even if the assignee has been in the space for several years and has always paid its rent on time? . . . . . . . . . 117

 

 

Sublet Consents . . . . . . . 118
Q: If a property owner gives its written consent to a sublet, why is it important to also add key protections? . . 118
Q: What are the conditions that should be included in the sublet's signed consent? . . . . . . . . . 118

 

 

Assignment Consents . . . . . . . . . . . . . 120
Q: Are the provisions of a written assignment consent similar to a written sublet consent? . . . 120
Q: What are the key provisions that should be in the assignment consent? . . . . .. . . . . . 120

 

 

Sublets . . . . . . . . . . . . 122
Q: How can a property owner or manager ensure that prospective subtenants won't pose a problem in a center or building? . 122

 

 

Information Before Processing Sublet Request . . 123
Q: What kind of information should the property owner ask for prior to processing the sublet request? . 123
Q: What should the letter requesting information about the prospective subtenant in a shopping center or mixed-used building include? . . . . . . . . 123
Q: How would a court determine whether a property owner's reason for denying a sublet request was objective or subjective? . 124
Q: Are some questions or objective factors better to use than others? . . . . . . 125
Q: What could happen if a property owner unreasonably withholds consent? . . 126

 

 

Rejecting Prospective Subtenant . . . 126
Q: Suppose the owner believes that a prospective subtenant will not fit into the tenant mix. Is it okay to deny the sublet request? . . . . . . . . . . . . . . . 126
Q: Should the property owner inform the tenant of the denial in writing? . . . . . . 127

 

 

Avoid Legal Relationships with Subtenants . . . . 128
Q: Why is it bad if the owner or manager creates a legal relationship with the subtenant? . . 128
Q: How can an owner or manager avoid creating a legal relationship with the tenant's subtenant? . . . . 128
Q: Are there any exceptions whereby a property manager or owner can accept rent, CAM costs, and other payments from a subtenant? . . . . 128
Q: Who should the subtenant contact if it needs repairs made to the space—the property owner or the tenant? . 129
Q: Should owner/manager communications be sent directly to the subtenant or go through the tenant? . . 129
Q: If a property owner decides to send copies of correspondence to a subtenant, should the correspondence be worded in any special way? . . . 130

 

 

Illegal Sublets, Unauthorized Assignees . . 131
Q: What if a tenant sublets its space without the property owner's consent, which is required in the lease. Can the owner take some strict measures against the tenant? . 131

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Dealing with Illegal Sublets . . 131
Q: If a property owner or manager finds out that a space is being sublet illegally, what steps can be taken to address the problem? . . . . . . . . . . . . . 131
Q: If the tenant is violating the sublet clause, would it be okay for the property manager to confront the tenant face-to-face? . . 131
Q: If the tenant receives the warning letter, but then requests the owner's retroactive consent to the illegal sublet, should the property owner go ahead and give it? . 133
Q: What if the tenant does not comply after receiving the warning letter? . . . . . 133

 

 

Dealing with Unauthorized Assignees . . . 134
Q: What can happen if a property owner or manager accepts a rent check from an unauthorized assignee? . . 134
Q: How can a property manager avoid accepting a rent check from an unauthorized assignee? . . 134
Q: If a staff member alerts the property manager to a rent check from a party that is not on the tenant and approved assignee list, what should the manager do? . . . 135
Q: What should the property manager do if it decides not to consent to the unauthorized assignment? . . 135
Q: What should the termination notice for unauthorized assignment include? . . . 136

 

 

Collecting Sublet, Assignment Rents and Profits . . 137
Q: Although a tenant's lease may give an owner the right to share any profit made from sublet space or an assigned lease, does not mean it will actually do so. How can the owner get accurate information about the profit? . . . 137
Q: Is rent the only consideration? . . 137

 

 

Share of Profit . . . 138
Q: How can a property manager or owner be sure it will get its share of tenant's profit from a sublet or assignment? . . 138

 

 

Tenant Violates Monetary Requirement . . . . . 139
Q: If a tenant that has sublet its space stops paying its rent, is there a way to collect the amount that is due from the subtenant? . . . 139
Q: How can a property manager or owner determine whether it has the right to collect rent from a subtenant when the tenant violates a monetary requirement of the lease? . 139
Q: What should the property owner do if the subtenant's argument is valid? . . . 140
Q: What recourse does the owner have if none of the above documents contains language giving it the right to collect rent directly from the subtenant? . . . . . 141

 

 

Right to Collect Rent from Subtenant . . 141
Q: If a tenant commits a monetary violation of its lease and the property manager has the right to collect rent from the subtenant, are there any steps the manager should take? . . 141
Q: How should the notice to the subtenant be worded? . . 141 

 

 

Collecting Rent from Subtenant . . . . . . . . 142
Q: Is the property manager or owner required to do anything with the rent it collects directly from a subtenant? . . 142
Q: What should the property manager do if the subtenant's rent is higher than the tenant's rent? . . . . . 142
Q: When should the property manager stop collecting rent from a subtenant? . . 142

 

 

Chapter 5: Alterations, Improvements, and Repairs
 

 

Repairs . . . . . 147
Q: When a tenant reports there is a repair problem in its space, why is it important to respond within a reasonable amount of time? . . . . . . . . . . . 147
Q: What if the property manager responds within a reasonable amount of time, but the tenant sues claiming the response was not soon enough? . . 147
Q: What steps should the property manager take to show that he responded to the tenant's request for repair in a timely, effective way? . . . . . . . . . . 147
Q: What type of information should be included on aRepair Tracking Form? . . . 148

 

 

Tenant Refuses Access . . . . 149
Q: Are tenants automatically required to give property managers access to make repairs? . . 149
Q: Do leases requiring the tenant to give the owner "reasonable access" define the term? . . . . . 149
Q: What would be the consequences if a tenant imposed reasonable limits on the manager's access to its space to make repairs and the manager failed to comply with those limits—and failed to make the necessary repairs? . 150
Q: But, if a tenant totally denies the property manager access to its space to make a repair, won't that lead to further damage and additional problems? . . 151
Q: What steps should a property manager take when a tenant refuses access to its space to make repairs? . . 151
Q: What if an oral request is not enough and the tenant still refuses to give the property manager access? . . 152
Q: What if the get-tough letter does not persuade the tenant to provide access to its space? . . . 153

 

 

Remodeling/Redevelopment . . 153
Q: A commercial property owner is considering redeveloping its shopping center to compete with new centers and stores in the area. Will that open the door to problems with tenants? . . 153
Q: What is the first step for an owner who has decided to redevelop a center or building? . . 154
Q: How important is it for the property manager to get the tenants' consent before making any planned renovations? . 154
Q: The worst thing a property manager can do is leave the tenants in the dark about redevelopment plans. How should the information be communicated? . . . . . 155
Q: How can the property manager use public relations tactics to sway community opinion or counter any community opposition? . . . . . 156
Q: How can the property manager convince tenants to relocate while the center is being redeveloped? . . . 157
Q: Are there other steps the property manager can take to ensure a smooth redevelopment? . . 157
Q: Is it wise to give concessions to tenants hurt by the redevelopment? . . . . 158

 

 

Contractors . . . . . . . . 158
Q: What is an RFP and what other information does it include? . 158

 

 

Requests-for-Proposals . . 158
Q: What are the basic items that are typically included in RFPs? . . 158
Q: What other items should the RFP include to make it more effective? . . . . . . . . . 159
Q: What if a contractor wants to bid on only a portion of the work the center or building manager wants done? . 160
Q: Why is it important to attach a complete set of architectural drawings or other type of plans to the RFP? . . 160
Q: Should the RFP require all contractors bidding for the job to include a copy of their standard contract with the bid? . 160
Q: Why should the RFP include an explanation of how the property manager will evaluate the bids? . .161

 

 

When Tenants Bring In Contractors . . . . 162
Q: Is there anything the building manager can do to make sure the contractor and his work crews do not damage property and disrupt other tenants? . . . . 162
Q: Should there be any rules for when the contractor and crew take lunch or work breaks? . . . . . 163

 

 

Roof Maintenance . . . . . . . . . . . . 164
Q: What are the benefits of having a roof management program? . . 164

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Roof Maintenance Program . . . . . . . . . . 164
Q: What should a roof management program include? . 164
Q: When should the roof be inspected and who should do it? . 165
Q: What should the manager look for during a roof inspection? . 165
Q: After the roof is inspected, what is the next step? . 166
Q: Are there any records that the property manager needs to keep? . . . . . . . . . . . . . . . . . . 167

 

 

HVAC System . . . . 167
Q: It is better to have on-site staff or a professional HVAC company do a check of a center or building's HVAC system? . 167
Q: What does an effective HVAC preventative maintenance program include? . . . . 167
Q: How often should air filters be replaced? . 168
Q: What are condensers? . . 168
Q: Does anything else in the HVAC system require check up and adjustment? . . . . 168
Q: When should the building or center manager replace the HVAC system? . . . . 169

 

 

Air-Conditioning Systems . . . . . 169
Q: There are two types of air-conditioning systems: individual condensing units and central chillers with cooling towers. Do they require different maintenance procedures? . . 169
Q: What are the steps for indoor maintenance of individual condensing units? . . . . . 169
Q: What should the maintenance staff look for when checking central chillers with cooling towers? . . . . 170

 

 

Graffiti . . . . . . . . . . . . . . . . . . . . . 171
Q: What are some of the consequences if graffiti is not removed promptly from the outside of a building or center? . 171
Q: Can there be any legal consequences if graffiti is not removed promptly? . . . . . . . . . . . . . . . . . . . . . . . . 171
Q: Are there any effective strategies a property manager can use to remove graffiti? . . . . 172
Q: What is the most common graffiti-removal technique? . . 172
Q: Is there a downside to using graffiti-removal products? . . 172
Q: When is it advisable to apply anti-graffiti coatings? . . 172
Q: When should the property manager consider sandblastingto remove graffiti? . . . . . . 173

 

 

Escalator Safety and Inspections . . 173
Q: What is "entrapment"? . . . 173

 

 

Minimizing the Risk of Entrapment . . .174
Q: How does entrapment happen? . . .174
Q: How costly is a lawsuit resulting from entrapment? . .174
Q: What are ASME A17.1 requirements? . .174
Q: What if an escalator does not meet the ASME A17.1 requirements? . . . . . 175

 

 

Daily Escalator Inspections . . . . . . 176
Q: Is it necessary for a building or center manager to require staff to inspect the site's escalators every day before putting them into operation? . . . . 176
Q: Should inspection procedures be written down and what should they include? . . . 176
Q: Why isn't it enough to simply lay out daily inspection procedures? . . . . . . . . . . 178

 

 

Americans with Disabilities Act . . . . . . . . . . . . 178
Q: What is the Americans with Disabilities Act (ADA) and how does it apply to office buildings and shopping centers? . 178
Q: Are there any limitations on the ADA's barrier removal requirements for existing buildings/centers? . 178
Q: Who is responsible for ADA compliance in leased places of public accommodation—the landlord or the tenant? . . 179
Q: When negotiating the ADA portion of a lease, which provisions should the owner pay special attention to? . 179
Q: Why are the indemnification provisions and the repair and maintenance provisions so important? . . 180
Q: How serious are the penalties for ADA violations? . 180
Q: Suppose the owner or property management is hit with an
ADA lawsuit. What actions should they take? . 181

 

 

Chapter 6: Parking

 

 

Illegally Parked Cars . . . . . 185
Q: Why are illegally parked cars a problem for property managers? . . . 185
Q: What specific problems can illegally parked cars cause? . 185

 

 

Selecting a Towing Company . . . . . . 186
Q: Why is it a good idea to hire a towing company to tow away illegally or improperly parked cars? . . . 186
Q: Who gets charged for the towing—the center or the car owner? . . 186
Q: What kinds of options do towing companies offer for deciding which cars will be towed? . 186
Q: How can a property manager find a qualified and reliable towing company? . . . . . . . . . . . . . . 187

 

 

Key Protections in Towing Agreement . . 188
Q: Once a property manager selects a qualified towing company to enforce the center's parking rules, what is the next step? . . 188
Q: What should be in the agreement with the towing company? . . 188
Q: In addition to spelling out what the towing company will do, what else should the agreement include? . 189

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Tenant's Employee Parking . . . . 190
Q: One of the toughest things for a property manager to do is prevent tenants' employees from parking in prime spots reserved for customers. How can a property manager minimize this problem, especially during the busy holiday shopping season? . . . . 190
Q: How can the property manager keep tabs on where the tenant's employees are parking? . . . . 190
Q: Is there any special enforcement language that should be included in the lease? . . . 191
Q: What if the property manager wants to move the tenant's employee parking area to another area in or near the center or building? . . . . . . . 192

 

 

Parking Problems in Mixed-Use Developments . . 192
Q: Suppose a mixed-use development has office, resident, and retail space, plus a parking garage. Will assigning floor spaces minimize parking problems? . . . 192
Q: How can the property manager prevent those violations from occurring? . . . . . . 192
Q: Are there other steps the manager can take to reduce parking violations in mixed-use developments? . 193

 

 

Reducing Parking Lot Incidents . . . . 194
Q: What are some of the typical incidents that can occur in a center's or building's parking lot that property managers need to pay attention to? . . . 194
Q: What are traffic calmers and what do they do? . . 194
Q: How do traffic calmers deter crime? . . 194
Q: Why is it important to choose the right type of traffic calmer for a parking lot? . . . . 195
Q: Where should the calmers be installed, e.g., every few feet, near corners? . . . . . 195
Q: Once the traffic calmers are in place, is there anything else the property manager needs to do? . . . 196

 

 

Renting Parking Spaces to Neighbor . . . . . 197
Q: Suppose a neighboring building wants to rent some parking spaces in a shopping center's parking lot. The prospect of getting extra revenue is enticing. But what does the property manager need to consider before approving the deal? . . 197
Q: Will the center's owner and the neighboring building need a separate parking agreement and, if so, what should be in it? . 197
Q: What if an injury or accident occurs in the portion of the parking lot that is used by the neighboring building? . . 198

 

 

Chapter 7: Marketing and Building Traffic Marketing Activities . . . 201
Q: Is it a good idea to get tenants involved in a commercial property's marketing activities? . . . . 201
Q: How can a property manager get tenants involved in a center's marketing efforts? . . . . . 201
Q: Who should the manager speak to? . 201
Q: Does it pay to speak to tenants' store managers, even if they do not have the authority to decide whether to participate in the center's marketing efforts? . . 202
Q: Which tenants should be approached first—the moms-and-pops or the nationals? . . . 202
Q: How else can the property manager get tenants more involved in the center's marketing efforts, especially when it comes to contributing money? . . . . . . . . . 202

 

 

Marketing to Specific Customer Segments . . 203
Q: Why are periodic shopper surveys important? . . 203

 

 

Conducting Shopper Surveys . . . . . . 203
Q: How often should a property manager conduct shopper surveys? Annually, twice a year? . . . . . 203
Q: Who should conduct the surveys—an outside consultant or staff? . . . . . . . . . . . . 204
Q: What are the various survey techniques? . 204

 

 

Mall Walker Programs . . . . . . . 205
Q: What is a mall walker program? . . 205
Q: What are the benefits of a mall walker program? . . 205
Q: How does the mall walker program typically work? . . 205
Q: What if a mall walker program participant gets hurt at the center—who is responsible? . . . 206
Q: Is setting up a relationship with a local medical facility necessary for a mall walker program? . . 207

 

 

Teen Zones . . . . . . . . . . . . 208
Q: What exactly is a teen zone and what are the benefits of creating one in a center? . . . . . 208
Q: Is there any advanced planning involved when setting up a teen zone? . . 208
Q: What are the key management issues of a teen zone? . . 209

 

 

Other Ways to Build Foot Traffic . . . 209
Q: In addition to special events, mall walker programs and teen zones, what else can a center do to build its foot traffic? . 209
Q: What about expanding the tenant mix and leasing space to nonretail tenants? . . . . 209

 

 

Technology-Based Marketing . . . 210
Q: How can a center take full advantage of the Web and other forms of technology to bring back customers? . 210
Q: Are there any other tech-based programs out there? . 210
Q: What are "smart screens" and what can they do? . 210

 

 

Chapter 8: Safety and Security

Security Audits . . . . 215
Q: What is a security audit? . . 215
Q: How does a security audit work and how often should one be done? . . . . . . . . 215
Q: How far should a good or effective security audit go? . 216

 

 

Security Measures . . . . . . . . . . . . 218
Q: In tough economic times, while reviewing budgets and trying to figure out ways to cut costs, why is it a bad idea to cut corners when it comes to center/building security? . 218
Q: What is property management's legal responsibility when it comes to a center's or building's security? . 219
Q: How can property management reduce the risk of liability for inadequate security? . . . 220
Q: Some property managers will exaggerate the level of security they offer just to lure new tenants. Why is that a bad idea? . 220
Q: Some property managers have admitted use of fake security devices to cut costs. Why can that be a huge liability? . . . 221
Q: Is there a way to avoid liability while using a fake device? . 221
Q: How often should security devices be checked to make sure they are in good working order? . . 221
Q: Before instituting new security measures, should the property owner or manager discuss the new measures with tenants? . . . 222

 

 

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Banning Guns . . . . . . . . . . . . . . . 223
Q: How can property owners or managers prevent or deter gun-related incidents from occurring at their building or center? . 223
Q: Are gun bans effective? Or can they backfire? . 223

 

 

Photo ID Cards and Security Clearances . . . 224
Q: Many buildings and malls now require tenants and their employees to carry special photo identification cards to verify their right to enter the center or building. Why is this a popular security clearance measure? . 224
Q: If an employee ends his employment, how can the property owner or manager guarantee that his security clearance is taken away so he no longer has access to the premises? . 224
Q: Are there any steps the property manager needs to take when canceling someone's security clearance? . . 225
Q: What if a tenant suddenly fires, escorts out, or has an employee arrested? . . . . . . . . 227
Q: Suppose a former tenant or employee returns to the building or center and attempts to gain unauthorized access. What should the property manager do? . . 227

 

 

Security Guards . . . . . . . . 228
Q: More centers and buildings are hiring security guards to patrol their premises. Can a property manager bill a center's tenants for a proportional amount of a security guard's salary as part of those tenants' CAM costs? . . 228
Q: Even though a building or center may have security guards who regularly patrol the premises, they cannot be everywhere at once, and some tenants may complain when they have a hard time getting through to security. What can the owner or property manager do? . . . 228
Q: Is there any way that a property owner can use existing staff, for example, janitorial staff, to beef up security? . 229
Q: Since most office building and shopping center crimes occur after hours, which is when the janitorial staff does most of its work, doesn't it makes sense to try to recruit these people to try to enhance after-hours security? . 230
Q: How can the property manager integrate the center's or building's janitorial staff's duties with the site's procedures for deterring crime, which all employees are expected to follow? . . . . 230
Q: Is there any way a property manager could ensure that the janitorial staff follows these procedures? . . 230

 

 

Installing Shatterproof Glass . . . . . . . 231
Q: Some property owners who are concerned with security measures have installed shatterproof glass on their center's windows, doors, and skylights. How does shatterproof film work? . . . . . . . . . . . . . 231
Q: What are the benefits of shatterproof film? . . . 231
Q: What issues should a property owner consider before deciding whether to install shatterproof film? . . . 232

 

 

Tenant Safety Tips . . . . . . . . 233
Q: How can the tenants in a center or building do their part to present a safe image, discourage criminals, and prevent after-hours crime? . . . . . 233
Q: What types of security tips should be given to tenants? . . 233
Q: If the property manager hands out a safety memo and a tenant is later the victim of a crime, could the tenant sue the property manager and owner claiming that they provided inadequate security information or that the safety memo did not contain tips that would have prevented the crime? . 233

 

 

After-Hours Policy . . . . . . . . . 234
Q: What can a property manager do to lessen the likelihood of after-hours burglaries at a center or building? . 234
Q: If the leases allow the owner to limit after-hours access to the center, what should the owner or manager do? . 234
Q: What procedures should be in place when someone enters the premises after hours? . . . . 235

 

 

Temporary Tenants . . . . . . . . . . . 236
Q: Should a property manager bother to screen temporary tenants? . . . . . . . . . . . . . 236
Q: How extensive should the background check be? . 236
Q: What should the background check include? . . 237

 

 

Illegal Tenant Activity . . . . . 237
Q: If property management is told that one of its tenants is conducting illegal activity in its space, but isn't sure if it is true, can the property manager just ignore this? . . . 237
Q: Does the property manager have to prove "beyond a reasonable doubt" that there is any illegal activity going on in the tenant's space before taking any action? . . 238
Q: Can the property owner evict a tenant suspected of conducting illegal activity in its space? . . 238
Q: What if the lease does not have the language mentioned above? . 239
Q: Should the property owner or manager send any notice or warning to the tenant? . . . 239
Q: Suppose the tenant receives the notice, but ignores it and continues to conduct illegal activity in its premises? . . 239

 

 

Counterfeit Goods . . . . . . . . . . 240
Q: What if a property owner and manager suspect that a tenant in their shopper center is selling counterfeit goods. How serious are the consequences for the property owner? . 240
Q: Under what circumstances could a court hold a property manager liable for a tenant's sale of counterfeit goods? . . . . . . . . . . . . 240
Q: What "reasonable efforts" can a property owner take if it suspects or knows that a tenant is selling counterfeit goods? . 241
Q: What if the get-tough letter doesn't persuade the tenant to stop selling counterfeit goods? . . . 243

 

 

Risk Management . . . . . . . . . 243
Q: What should a building owner do to ensure that its building's emergency evacuation plan addresses the needs of disabled people? . . . . . 243

 

 

Reopening After a Disaster . . . . . . 244
Q: If a shopping center or office building is severely damaged by a hurricane or another disaster, what, if anything, does the property owner need to do before reopening? . . 244
Q: What does the property owner need to check to make sure its center or building is fit to reopen? . 244
Q: Can the property owner do the evaluation alone or should he get help? . . . . . 245

 

 

Elevator Breakdowns . . . . . . . 246
Q: Why is it important for property management to train its staff on how to respond when a passenger-filled elevator breaks down? . . . . . . 246
Q: How can property management go about training its staff on how to respond to elevator breakdowns? . . 246
Q: What should the staff memo outlining the procedures for elevator breakdowns include? . . . 247

 

 

Incident Reports . . . . . . . . . . . 248
Q: How can incident reports be used to limit a property owner's liability against false and exaggerated claims? . . 248
Q: What should an incident report include? . . 249
Q: On the other hand, what shouldn't an incident or accident report include? . . . . 250
Q: How long should incident reports be kept? . . 251

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Chapter 9: Insurance and Liability

 

 

Property Management Insurance . . . . 255
Q: Why is having adequate insurance coverage so important for commercial property management companies? . . 255
Q: Although each management company has its own specific needs, is there any basic insurance that management companies should have at a minimum? . . 255
Q: How can a management company get the best insurance coverage for its money? . . 256

 

 

The Bidding Process . . . . 257
Q: If the management company decides to bid out its insurance coverage to get a better deal, how frequently should that be done? . . . . . . . . . . . 257
Q: How can a property management company be sure that it has a good insurance broker or agent? . 257
Q: What should be included in the management company's bid package? . . . . . . . . . . . 258
Q: What is included in the risk information form and loss history? . 258
Q: What should the specification include? . . . 258
Q: How much umbrella insurance should a property management company buy? . . . 259
Q: After the brokers submit property management's bids and get the insurers' quotes, what is the next step? . . 260

 

 

Expired Insurance Policies . . . . . . 260
Q: Why is it a bad idea to throw out expired insurance policies? . . 260

 

 

Liability . . . . . . . . . . . . 261
Q: As commercial property owners and managers prepare theirbuildings and their land for public foot traffic and occupancy, limiting premises liability becomes a priority. What is premises liability? . . . . . 261
Q: What types of incidents fall under the category of premises liability? . . . . . . . 261

 

 

Limiting Premises Liability . . . . 262
Q: How do the courts determine premises liability? . . 262
Q: What does the legal term "status" mean? . 262
Q: How do the courts differentiate an invitee from a licensee or trespasser? . . . . 262
Q: Are there any exceptions to the rule on trespassers? . . 263
Q: Will the courts consider anything else, such as condition of the property or visitor actions? . . . . . . 263
Q: Although it is virtually impossible to prevent some accidents, are there any steps the property manager or owner can take to avoid costly premises liability lawsuits? . . . 264

 

 

Filing Insurance Claims . . . . . . . . . . . . . . . . . 265
Q: Suppose there is a fire in an office building. The property management company files an insurance claim, but the claim is delayed or denied. Why? . . 265
Q: How can property management reduce the chance of an insurance claim delay or denial? . . . . 265
Q: How quickly should property management notify the insurance company about the claim? . . . . . 265
Q: Why is it important to comply with insurers' notice requirements and other policy conditions? . . . 265
Q: Is there anything the property manager can do if the insurer denies the claim based on a technicality? . . . . . 266
Q: How important is it for property management to cooperate with the insurance adjusters? . . . . . . 266
Q: What claims' records should property management keep in its files? . . . 267
Q: What should the property manager do if the insurer denies the claim? . . . . 267
Q: Suppose the insurer is willing to pay the claim, but on condition that the property management company waives its right to make future claims. Should the management company accept the payment on that condition? . 268

 

Tenants' Insurance . . . 268
Q: What types of insurance policies should a commercial property owner or manager require its tenants to have? . . 268

 

 

Environmental Insurance . . . . 270
Q: Some attorneys have advised commercial property management firms to make sure their tenants get environmental insurance coverage. Why is it so important? . . 270
Q: Doesn't the indemnification clause in the tenant's lease protect the owner and management company from those lawsuits? . . . 270
Q: What is a pollution legal liability (PLL) insurance policy? . 271
Q: Who should pay all the costs related to getting the PLL insurance policy and keeping it in effect? . . . 271
Q: What else does the property owner need to be aware of when requiring the tenant to get PLL insurance coverage? . 271

 

 

Proof of Insurance . . . . . . . . . . . . 272
Q: Is it necessary for tenants to provide property managers or owners proof of insurance? . . . 272
Q: What is in the ACORD 28 form? . . . 272
Q: How does the ACORD 28 differ from the standard certificate of insurance form ACORD 24, which some tenants offer as proof of insurance? . . . . 273
Q: Are there any drawbacks to the ACORD 28? . . 273
Q: Even if a tenant supplies proof of insurance, can the property manager or owner still have problems? . 273
Q: Suppose the property management company assigns one staff member to collect proof of insurance from every tenant. bWhat should the staffer look for? . . . 274
Q: What should the property management company do if a tenant is uncooperative in providing proof of insurance? Can it go directly to the tenant's insurance broker? . . 274

 

 

Chapter 10: Guaranties and Holdovers

Guaranty Agreements . . . . . . 277
Q: What is a guaranty agreement? . . 277
Q: What is a "good-guy" guaranty? . . . 277
Q: How does the law protect guarantors? . . 277

 

 

Releasing Tenant's Guarantor . . 277
Q: Is there any way a property management company could inadvertently release a tenant's guarantor? . 277
Q: How can property management prevent those problems from occurring? . . . 278

 

 

If Guarantor Dies . . . . . . . . . . . . . . . . . . . . 279
Q: Ideally, the tenant, of its own accord, should notify property management and the owner if its guarantor dies. But is there any way to make sure the tenant actually will provide notification? . . . . . 279
Q: Regardless of how the owner/property management is notified of the guarantor's death, are there any steps they can take to protect their interests? . . . 279
Q: If the tenant violated the lease either just before or soon after the guarantor's death, can the owner/property management still pursue their rights under the guaranty? . . 280

 

 

Limited Liability Entities . . . . . . . . . . . . . . 280
Q: Do management companies face special challenges when the tenant they are renting space to is organized as some kind of limited liability entity? . . . . . . . . 280
Q: Are there any specific requirements that should be included in the lease clause to get valid guaranties from a limited liability tenant's shareholders, partners, or members? . . 281
Q: What should the owner do if the tenant wants it to agree to release its guarantors from liability under the guaranty when certain events occur—for instance, death, disability, or resignation? . . . . . 281

 

 

Invalid Lease Provision . . . 282
Q: Can a guarantor get off the hook when a lease provision is illegal? . . . . . . . . . 282

 

 

Holdovers . . . . . . . . . . . . 282
Q: Suppose a tenant stays in its space after the initial and renewal lease periods expire. If the tenant refuses to pay the full amount of holdover rent, will the guarantor pay the deficiency? . . 282
Q: How can a property owner get the guarantor to pay the deficiency? . . . 283

 

 

Holdover Tenants . . . . . . . . 283
Q: What exactly is a holdover tenant? . . 283
Q: When are holdover rents applicable and how much can be charged? . . . . . 284
Q: If the original lease does not include a section regarding holdover rents, can the owner still get the increased rent from the holdover tenant? . . . . . . . 284
Q: What action does the owner need to take if it can charge the tenant a holdover rent? . . . . . 284
Q: What if the tenant refuses to pay the holdover rent? . 284

 

 

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Chapter 11: Management Company Employees

 

 

Employees vs. Independent Contractors . . 289
Q: Tax laws classify workers as either independent contractors or employees. What is the difference? . 289
Q: How can incorrectly distinguishing employees from independent contractors get property management companies into trouble? . . . . . . . . . . . 289
Q: How much control is enough to require employee or independent status? . . . 290
Q: What should the property management company do if it realizes that a worker cannot be considered an independent contractor? . . . . . . . . . . . 292

 

 

Federal Guidelines . . . . 293
Q: Do federal laws require employers—including management companies—to post signs explaining legal information to their employees? . . . 293
Q: Which signs should be posted? . . 293

 

 

Americans with Disabilities Act . . . . . 294
Q: What is the Americans with Disabilities Act (ADA) and how does it apply to a property management company's employees? . 294
Q: Who is protected from employment discrimination? . 295
Q: How does the law define a qualified individual with a disability? . . . 295
Q: Does an employer have to give preference to a qualified applicant with a disability? . . . 295
Q: How does the ADA apply to employee attendance and leave policies? . . . . 295
Q: Are applicants or employees who use illegal drugs covered by the ADA? . . . . . . . . . . . . . . . . . . 296
Q: Is it okay for an employer to test applicants or employees for the use of illegal drugs? . . . . . . 296
Q: Are people who abuse alcohol covered by the ADA? . . 296
Q: Does the ADA override other federal and state health and safety laws? . . . 296
Q: How are the employment provisions of the ADA enforced? . 296

 

 

OSHA Recordkeeping Rules . . . . . 297
Q: When did OSHA's revised recordkeeping rules for the workplace go into effect and who does it affect? . . 297
Q: What about management companies? . 297
Q: What are the penalties for noncompliance? . . 297
Q: One of OSHA's recordkeeping rules requires keeping records of deaths, illnesses, and injuries that are work-related. What would these include? . . 297
Q: Are there any other requirements? . 298
Q: Which OSHA forms must be filled out in order to be in compliance? . . . 299
Q: Does OSHA have special reporting requirements for deaths and hospitalizations? . . . . 300

 

 

USERRA . . . . . . . . . . . . . . 300
Q: What is USERRA? . . . . . . . . . . . . . . 300
Q: Who is protected under USERRA? . . 300
Q: Can an employer refuse to hire someone because he has served or intends to serve in the military? . . . 301
Q: Does the employer have to continue to pay salary and benefits to someone who is called for military service? . 301
Q: Is a company required to reinstate a returning employee? . . 303
Q: How much time does the returning employee have to report back to work? . . . . . 303
Q: Under what circumstances can a company terminate a returning employee? . . . . . 304

 

 

Screening Job Applicants . . . . . . . . . . . . . . 304
Q: Why is it important for a management company to screen job applicants? . . . . . . 304

 

 

Application Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304
Q: What can a property owner or management company do to minimize "bad apple" hires? . . . 304
Q: What are the common red flags to look for in an applicant's information? . . . . . . 305
Q: Should the company immediately reject an applicant just because it uncovers a red flag? . . 305

 

 

Drug, Alcohol Use . . . . . . . . . . . . . . . 306
Q: Does the ADA impose any restrictions on the questions that employers can ask applicants about drug or alcohol use? . . 306
Q: What specific questions can an employer ask regarding drug use? . . . . 307
Q: Can an employer ask applicants about past alcohol- or drug-related convictions? . . . . . . 307
Q: Is an employer allowed to ask applicants to be tested for drug or alcohol use? . . . . . 308

 

 

Employment Eligibility Verification . . . . . 308
Q: What is the I-9 Form and when should it be used? . 308
Q: How soon does a company need to confirm a new hire's identity and authorization to work? . 308
Q: What types of identity documents are acceptable? . 309
Q: What should the employer do with these documents? . 309
Q: Are there any times when employers are required to update this information? . . . . . 310

 

 

Employee Problems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310
Q: How seriously does employee theft impact a shopping center or building? . . . 310
Q: Are there any internal controls that can help to prevent or detect employee theft? . . . . 310
Q: What types of questions should an internal controls audit include? . . . . 311

 

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