Irma Damage Claims Show Value of Tenant Representation Services
With tropical storm Irma lingering, many commercial real estate tenants are searching and filtering through their leases and insurance policies. They are wondering what can be claimed under the landlord’s policy and their own. This is just another example of how important it is to have a professional tenant representative services from property search through move-in and beyond. Entering into a building lease can create major financial loss exposures for landlords or tenants. The approach a business takes with regards to a real estate lease can make all the difference in the world.
Who Is Responsible for Property Insurance?
In most cases, landlords should buy their own insurance covering the leased property. However, tenants can be required to provide the building coverage. Should the tenant be required to obtain property insurance on the building, the following guidelines should be followed:
To verify values, replacement cost provisions, and additional coverages leases usually require that the tenant obtain the landlord’s approval of all the insurers and coverage characteristics. The landlord should have notice of any cancellation or other change in the status of the policy. Can the tenant ask for the same to make sure that the renter’s interests are covered? Pollock Commercial tenant representation services negotiate so much more than the price per square foot and length of the lease.
Another basic rule of thumb is that the policy should name both the landlord and tenant as named insureds and cover the interests of any mortgagee. The landlord should retain an original copy of the policy, but again the tenant should be able to have a copy.
What Can We Do?
We bring our clients peace of mind by making sure that the lease clearly spells out what the tenant’s obligation to pay rent actually is in the event of a partially or totally damaged or impaired premises. If the lease is silent and does not address this important issue, state laws will determine the applicability of rents. Laws in most states say a lease can be canceled, abated or adjusted depending on the amount of damage to the premises.
We offer representation to landlords and tenant representation services. There is always a fair balance that mitigates the risk of both parties. Business income requirements can create a serious financial exposure for a tenant. This means they must continue to pay rent in the event of impaired or unusable premises. However, landlords can also face a loss of rental income if the lease provisions dictate rent abatement or even termination.
The key is to properly plan before you enter into a commercial property lease. The professional guidance you receive with our tenant representation services will pay dividends over and over again.