The economic recession has prompted some tanning salon owners to try to get out of their leases early – while salvaging as much of their assets as possible. Check out some related tips in this month’s instalment of commercial leasing Q&A’s:
Q. What is the best (and least expensive) way to negotiate an early lease termination? I’ve got 14 months left on my lease (paying $4,800/month) but I want to close my business. I would prefer not to file bankruptcy.
One of the simplest, most cost-effective ways to terminate a lease early is by finding a replacement tenant. Prior to doing so, I approach the salon owner’s landlord and honestly explain that the business is not doing as well as the owner had hoped. In this conversation, I am always careful never to blame the location, as the landlord may get defensive. Many landlords will understand and, with my help, try to re-lease the space now rather than later (it is to a landlord’s benefit to have a tenant who can pay rent as opposed to a tenant who cannot). Traditionally, there is no penalty for the salon owner in this process.
Q. Do I have three business days to back out of an Offer to Lease?
Simply stated, the answer is “No.” This rescission period is whatever the Lease Agreement states.
Q. I am trying to open a secondary location. I've located an ideal space to lease; however, the landlord’s office is situated in another state and the landlord’s leasing agent is proving to be difficult to work with. What would you suggest I do in these circumstances?
I have encountered this problem occasionally. When the leasing agent is not being professionally responsive to a potential tenant’s enquiries, I have no choice but to call the landlord’s office or property manager directly to ask why this is happening. This will result in getting the leasing process back on track.
Q. I am confused about the two terms “leasehold improvements” and “fixtures.” Are these different? If so, how?
It’s important to differentiate between leasehold improvements and fixtures. Lease Agreements do often say that the landlord takes ownership of leasehold improvements that are glued, screwed or nailed down.
Q. I am paying my rent per square foot. How can I ensure the proper area measurement?
With commercial rent being typically paid by the square foot, you are very wise to question this measurement. By means of an independent measurement, I often find the original numbers to be incorrect. Whether by a simple oversight or a miscalculation, a difference of a few square feet can add up to thousands of additional dollars in rent paid by the tenant. Measuring your space will help prevent paying rent on “phantom space.”
Want to see your leasing question answered? E-mail dalewillerton@theleasecoach.com and watch for the answer on LookingFit.com!
Dale Willerton is “The Lease Coach” and a certified lease consultant who works exclusively for tenants. As an ITA member, The Lease Coach has spoken at many North American tanning conventions (including three times at the World Tanning Expo in Nashville). Willerton is a scheduled presenter at this year’s West Coast Tanning Expo (June 14-15, 2010) in Las Vegas. He is also the author of “Negotiate Your Tanning Salon Lease or Renewal.” Call him at 800.738.9202, e-mail dalewillerton@theleasecoach.com or visit www.theleasecoach.com or www.helpuleasetanning.com.
