Financial wellness for brick & mortar business Running a brick and mortar business means that you are likely to find yourself with the overwhelming task of renting commercial space. I will share a few lessons that we have learned in our search, negotiations, and rental of commercial property in Roanoke for The WellNest. Nothing in this column is intended to replace the advice of your lawyer or accountant.
Commercial Real Estate vs. Residential Real Estate The Virginia Department of Housing and Community Development shares that tenants and landlords have legal protections under the Virginia Residential Landlord and Tenant Act (VRLTA), which applies to most residential rental properties in Virginia. Still, residential tenants are responsible for reading and understanding terms of their lease and possibly consulting an attorney before signing.
GUEST COMMENTARY By Valarie Angle Executive Summary: The more you consider on the front-end, the less surprises you will have down the road. Our wellness column writer and business owner learned the hard way - and wanted to share those lessons.
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Likewise, tenants signing a commercial lease should thoroughly read, understand, and negotiate terms in their lease to suit their own needs as well as accept the requirements set by the property manager. Melissa Sevier of Briglia Hundley Law Firm shared that “unlike the Virginia Residential Landlord Tenant Act, which offers substantial guidance on the rights and obligations of residential landlords and tenants, the Code section governing non-residential tenancies leaves many of these determinations to the contracting parties.” Often, property managers email a generic lease template and direct tenants to Docusign with no discussion.
Lease considerations Some of the common negotiations that we recommend discussing and fully understanding relate to Common Area Maintenance (CAM) Fees; Security Deposit and Refund; Utility Billing; Zoning Approval; Fire Code; Use of Property; Access; Rent Increase; Renewal; Build-Out; Repairs; Provisions for Natural Disaster/Force Majeure (remember COVID). If CAM, Utilities, and other combined fees leave room for unforeseen charges, ask for a flat fee incorporation into the rent or a combination of fees. You do not have to simply accept the terms of the lease as it is sent. Our best experience was with a property owner who shared an outline back and forth with us before ever drafting the final lease. In one case, before signing a lease we discovered that the fire marshal had deemed occupancy for the building at only 40 people due to code inadequacies. We were expecting to be able to operate events of over 400 people. We were fortunate that we were able to have a conversation with the fire marshal to answer questions that the building owner couldn’t. When
