Tips on Resolving Landlord/Tenant Issues

I own a large commercial building, and one of my spaces is currently rented to a restaurant. There are more than a few times that I've wondered if I am cut out for being a landlord, or whether if it would just be easier to let the bank have the property. The most recent time happened this past week. We received a call from the restaurant saying that the heater was not working. Because the heater is rather old, it has its quirks, and the pilot light is somewhat difficult to light. My husband and I both visited the building, and found that the pilot light was lit, but it never came on. We had our handyman check on it, and he went to the basement to check the electricity. That's when he found out that there was three inches of standing water. Even worse, they had known about it for a week, during which time, we or our representatives had been in there a total of five times, and they did not mention it. The water came from a leak in a pipe, which is still leaking. This is certainly an obvious case for neglect, and I should end the business relationship right now. Right? No. Here are the steps we have used, and are currently using to resolve this situation successfully.

Have a solid lease in place before issues ever arise. This seems to be a silly thing to say, but many people think something may be in their lease that is not. As a landlord, you must be able to speak 'legalese" fluently. Before I read my contract, I thought that I could have my handyman come in and fix the problem, with no notice due to its emergency status, and he could charge them his total bill, plus a 15% fee payable to us for overseeing the job. This is not the case. First, this is not the kind of emergency where he can enter the property immediately. We gave them notice, however they were more than happy to let us in. Furthermore, the handyman cannot trace electrical wires while standing in water, so we wrote a letter detailing that the water issue must be resolved before we can safely begin work on the heater. Because it is getting cold, and they want a heater, they are all too happy to oblige. Second, they caused the issue, and we are giving them a chance to rectify it. They have someone in the family that does plumbing, and they could come out to look at it the next morning. Because our handyman could not be there before that evening at the earliest, we gave them the opportunity to correct the leak and water issue. But we reserved, and will exercise, the right to have our handyman inspect and approve the work. I have worked with our handyman longer. I trust his opinion. If he tells me they did not properly fix it, it will be redone. On the other hand, if he tells me they did an excellent job, I am satisfied that they have corrected the problem. Third, the 15% fee called for only applies if they completely neglect to fix the issue. This is fair, and I have no interest in making extra money off of what was probably a simple mistake. They were concerned about getting the heater working before they lost business. They are most likely telling us the truth when they say it slipped their minds. But by knowing my contract and reviewing it, I was able to see that they are liable, and what sections apply to this problem.

You must put aside personal feelings and act in a fair manner. When I first heard about the issue, I was livid. How could anybody do that to my building? They've known about the leak for months and the water in the basement for a week! How irresponsible! The truth is, nobody will love your building as much as you do, but this is not about love. They are concerned with the day to day operations of their restaurant. Any number of things could cause them to forget that they need to inform me of the problem. So it is not fair for me to impose a large number of "sanctions" that they cannot possibly meet. In the end, that will make them see me as an unreasonable person who cannot be worked with, and they will end their lease. Because I cannot afford to have my building unoccupied, acting irrationally would hurt me in the long run. But I don't want to leave them with the impression that I will cover all the expenses for this either. The fairest solution in this case is to give them the opportunity to correct the problem. In this case, the standing water must be removed, the drain must be unclogged, the leak must be fixed, and the area must be treated to remove any chance of mold. Because this is a restaurant and because I don't want to deal with mold issues when I decide to sell, the mold is an important issue to be addressed. Making them pay for two tests and mold abatement is not fair. Giving them a timeline that the mold issue must be addressed by, and requiring a professional certification that the building is mold free is fair. In the end, the same thing is accomplished. My building is mold free.

Don't be afraid to seek professional help. I have other obligations that mean I cannot stand all night in a pool of water, sucking it up with a shop vacuum, and carrying it to the nearest drain that isn't clogged. They are too busy running a restaurant to do that work. This is a time when it is appropriate to seek professional help. Another time would be if I had trouble understanding the lease. I do not want my lack of understanding to cause me to act in a manner that the lease does not allow. This would be disastrous to the business relationship. With both of these situations, the trick is to know when you are unable to do something, and find someone who can do it. The benefits of doing so are deeper than you may realize. Not only does the issue get resolved, but it signifies to the other party the seriousness of the situation. You are a landlord, not a plumber. If they do not contact you when the issue is small, they will be responsible for paying for a larger issue.

Finally, take a more active role in your building. While it is certainly true that nobody will love your building as much as you do, it is also true that nobody will care for it the way you would. You are not there to repair and paint every nail hole from day to day. And the reasons they won't take as much care of it are a combination of the facts that it is not their building, they are too busy, and they don't want to bother. A good clause to put in your lease is that every month, on the same date, you will be by the building to do an inspection. This serves as your written notice for entering the building. If they are there, you can discuss any issues they are having. If they are not, this offers you the opportunity to see any problems that they may be keeping from you. Either way, it lets them know that you are taking an active role in keeping the building going, and tells them exactly how you expect it to be maintained.

In short, there is no reason to ruin a good business relationship when things go wrong. And certainly, things will go wrong. As long as you are able to step back from the situation and see it from all sides, it is easier to find a fair solution to the problem that will keep both parties happy, and maintain your building's function as a commercial space for a long time to come.