#4: DON'T BE FOOLED BY "STANDARD" TERMS
"Any fool can make a rule and every fool will mind it." - Henry David Thoreau
In every business category we are accustomed to dealing with industry norms, customs, and standards. These so-called "standards" may have been set by government, by trade associations, by unions, or by management - your management or a vendor's management.
You probably can't count the number of times in your career that you have asked a vendor or supplier about a certain practice, and gotten the answer, "Oh, that's standard industry practice." It is a favorite bromide in almost every business category, but as the late Douglas
Macarthur said, standards are " . . . too often for the lazy to hide behind."
Many extras are not "standard"
Too often, also, many so-called "standards" are not standard at all. Rather, they are terms that are woven among some true industry standards that a vendor expects or hopes will be accepted by a buyer, or in this case, an office tenant.
Because there are so many extraneous items beyond the monthly rent in most office leases it is critical for tenants to be able to separate what is truly standard from that which is not. True industry standards are those with which you may be faced in, virtually, any lease negotiations. Those that are merely labeled "standard" by a landlord for expediency's sake are the ones for which tenants must be on the lookout.
No more basic an item than measuring the amount of space to be rented is a case in point. There is, indeed, what is called the BOMA (Building Owners and Managers Association) standard for measuring office space. It is not unique, though, for a landlord to use his own creative measuring formula and refer to it as "industry standard." Inaccurate space measurement not only will likely increase the space on which your rent is figured. It may increase also your portion of a building's "common area" that is apportioned to your monthly rent.
You could pay extra twice
Thus, if the true BOMA standard is not used you could end up being overcharged twice each month for your office space.
More often, though, it is add-on items involving "building operating costs" that become rent extras and may be defined by the landlord as "standard practice." In this case, there are, indeed, several items that have become industry practice for which to charge in addition to rent. Since so few buildings are exactly alike, however, many add-on items that may pertain to a specific building peculiarity often are said to be "standard."
Ownership and operation of an office building is complex. Owners and landlords are faced with an endless escalator of costs that can not always be foreseen when setting rental rates. They must either inflate rents to account
therefore, or be very creative in doing what they can to impose extraneous charges to offset these costs.
Broker commissions are in your rent
That is why it is critical for tenants to be represented by their own, tenant-exclusive real estate broker who is free of any conflicts, and who has the experience to benefit the tenant. Every landlord budgets in your rent an amount for brokerage commissions. Since you're' paying for it, you should see to it that at least some of your money works for you, rather than going 100% to the landlord's broker whose interests are the landlord's, not yours.
MalmoMemphis Real Estate, Inc., represents office tenants. When we represent you
there will never be any question of where our loyalty lies. We are your expert, independent advocate.
The 'Tenant's 10-Point Guide to Leasing Commercial Space'
is copyrighted by MalmoMemphis Real Estate, Inc., (MMRE) and may not be
reproduced without the expressed written consent of MMRE, and the
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