ADN WINTER 2022_WEB

DETAIL DOCTOR
When it’s time to retire
The ability to assign a lease or to sublet is important if there’s a possibility
that the business owner may want to sell the business or pass on the
business to a family member.
THE MEANING OF
‘EXCLUSIVE USE’
Always ask for exclusive use, meaning
there cannot be another car wash or
detail business on the property, say if it
is a strip mall or a commercial property
lot full of various business. Also ask for
a lease structure that includes monetary
default rather than non-monetary. For
example, if an accident happens and you
don’t pay your rent one month, make
sure you have the right to cure (that) …
if I were a tenant, I would want it so that
a non-monetary default could not lead to
them taking the space back.” It could be
that fellow tenants complain about excessive
noise coming from your business due
to buffers and/or vacuums, or you place
signs in your windows that aren’t permitted,
“(the landlord) can default you but it
doesn’t mean they can evict you.
Regarding signage, ask if your business
name can be included in the center’s pylon
or monument sign for greater visibility.
And seek to have parking spaces nearest
your business entrance/exit designated for
your customers’ use only, as needed.
DON’T BE PETTY,
IT WILL BACKFIRE
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Whenever there is a disagreement
with your landlord, always pay your rent
on time, no matter what.
Some tenants think, ‘I’m going to
withhold my rent and send a message!
That will show ‘em!’ No, you won’t. Instead,
you’re going to lose all your power.
Instead, pay your rent, then fight.
Communicating with the landlord
beyond mailing or dropping off the rent
check each month can have its benefits.
All healthy relationships have boundaries,
and a business contractual agreement
is no different.
If you have the ability to have a cup of
coffee with your landlord once a year, that’s
pretty helpful. First off, it humanizes your
business relationship. You know you’re
dealing with (this person) vs. ‘the big, bad
landlord.’ You also get to know them a little
bit better, and it’s also good for them
to have a sense of how your business is
doing.
CHEAPER PROPERTY
COMES AT A COST
The more knowledgeable the
tenant, the better the tenant, and part
of developing this knowledge base is establishing
realistic tenancy expectations
based on the age and condition of the
property you want to lease.
If you go into a 30-year-old auto service
mall with no anchor (tenant) and
you’re paying cheap rent, you should
have a low expectation of what your
landlord’s going to do. There’s not a lot
of money to do things, as opposed to
a brand-new, high-end property. Have
clarity about what you expect them to
do and not do.
IF YOU HAVE
TO MOVE ON
Relocation would likely be difficult
and costly for the you and owner leasing
their property. So, what can a new
owner do to protect the business against
the prospect of relocation?
Have the lease spell out what would
happen if the business were to be relocated.
For instance, it could only be
moved to a similar spot (if the detail shop
is located on one end of a strip mall, or it
could be moved to the other end but not
somewhere in the middle, for example).
And be sure to put in the agreement
that it’s all on the landlord’s dime if you
have to relocate. The landlord has to pay
for the relocation costs, and the space has
to be provided with all impact fees paid.
You need to detail all of this out so that everyone
knows who is responsible for what.
WHO IS RESPONSIBLE
FOR WHAT?
Common area maintenance (CAM)
fees are paid by tenants to landlords to
help cover costs associated with common-area
overhead and operating expenses,
such as removing snow from the
parking lot or maintaining building security
and landscaping. While most leases
clearly spell out these fees, many tenants
re surprised by them when their first
rental payment is due.
You need to know exactly what the
dollar amount it is you’re writing out at
the end of the month. Whether it’s triple
net, whatever it is, with sales tax, what
is the exact dollar amount? Fully understanding
what (that covers) is absolutely
key. Have an itemized list on your agreement
so you’re not shocked when you’re
paying a large fee for snow removal in a
state with little to no snow, for example.
Also, look around at the landscaping efforts
on the property. If you have to pay
for the maintenance of a few sad looking
grassy areas, is it even worth it?
There’s a lot to know about leasing.
You as a detail business owner have the
opportunity to negotiate a unique agreement
that’s beneficial to you and future
of your business. Look for red flags with
a potential real estate attorney and with
a landlord and choose wisely before you
agree to anything.
And remember, if you can’t agree on a
deal on your first choice for a site, there’s
more than likely another suitable property
right down the road that’s more than
fit to lease. If I can help you answer any
questions or concerns, feel free to reach
6 | AUTO DETAILING NEWS | VOL. 7, NO. 4 • WINTER 2022