Imagine you’re about to open a new retail location. You’re excited because you landed the perfect spot, and the landlord is thrilled because the first rent check just cleared the bank. But in the moment, no one is thinking about memorializing the first dates and milestones. And why would you because everyone is aware of the dates…they’re in the email! But years from now when the email can’t be found and your lease options hinge upon key commencement dates, the mad scramble beings to identify those long-lost details.
To avoid those issues the next time you sign a new lease, take a few minutes to ensure you and your landlord exchange the information below.
In most situations, the day the location opens becomes the lease commencement date. While most leases stipulate that some type of commencement verification letter must be drawn up, this step is often overlooked. Important for the life of the lease, the commencement date dictates when rent payments are due, the option dates, rent escalation dates, the lease year, CPI, percentage rent, expirations, and so forth.
If your lease or start-up paperwork didn’t include a list of primary contacts on both sides, it’s a good idea to formally exchange this information. You should know from the beginning who the landlord wants you to reach out to for issues like facilities management, accounting and legal. The landlord also should have a list of point people within your organization.
Before going too far down the road with your new landlord, you also must have all the information needed for financial transactions. Start by obtaining a W-9 so you’ll have it when tax time rolls around. Also determine your landlord’s preferred method of payment because it may take a little time to establish an account like an ACH. By confirming awareness of all recurring payment items, both parties will be protected.
If your company doesn’t have a process for memorializing key dates and milestones, we invite you to download Property Works’ COMMENCEMENT VERIFICATION AGREEMENT template. By taking this small step, you’re eliminating possible conflict and confusion down the road, and getting your landlord relationship off on the right foot.
If you’d like to learn more, contact Karla Finnegan for a no-obligation demo today.