Is it normal for landlord to request to review annual financial statements for tenants ?
I didn’t sign lease yet, still negotiations
[{"id": "ewgguc7", "text": "I don\u2019t work in office or retail but my guess is that the landlord is trying to refinance or sell and the lender or buyer wants to assess the creditworthiness of the tenants. Of course i don\u2019t think you have to provide this info unless stipulated in the lease.", "replies": [{"id": "ewhp8et", "text": "Its very common in commercial leasing", "replies": [], "depth": 2}], "depth": 1}, {"id": "ewghdff", "text": "Yes it's pretty common, review the lease to see if its in there.", "replies": [], "depth": 1}, {"id": "ewghs1k", "text": "If you are in negotiations for a new lease or renewal it is common. If you are already a tenant and your lease does not require you to provide them, then no I would say that isn't too common.", "replies": [], "depth": 1}, {"id": "ewghtvd", "text": "If it\u2019s in the lease, yes.", "replies": [{"id": "ewgkf98", "text": "I didn\u2019t sign lease yet", "replies": [{"id": "ewgy69e", "text": "Still standard as they want to confirm you have the ability to pay the rent.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ewgi4xq", "text": "Yes, I do this for every deal.", "replies": [], "depth": 1}, {"id": "ewgjxky", "text": "Yes, that\u2019s standard.", "replies": [], "depth": 1}, {"id": "ewgklak", "text": "In my experience (in Canada) for an office tenant they will request review of Financials at one point in time - as a condition of the offer - but not annually. However if there is concern about the tenants financial covenant there might be a scenario where they will ask for Financials annually. For Retail tenants yes this is common- sometimes more frequently.", "replies": [], "depth": 1}, {"id": "ewgl1mk", "text": "I require it. Small businesses I also require a personal guarantee so I ask for individual tax returns and bank statements as well. We provide a very generous TI budget. I need to be confident that the tenant has the resources to get off the ground.", "replies": [{"id": "ewhmods", "text": "I ask for the the most recent three months of bank statements.  The banks are too slow or difficult to verify balances these days.", "replies": [{"id": "exg27q3", "text": "Same. I typically ask for last 3 months of bank statements and last 2 years tax returns and run their credit.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ewglp1v", "text": "It's just ordinary due dil - you want to know who you're getting into bed with, right?", "replies": [], "depth": 1}, {"id": "ewgn5vy", "text": "Every deal yes", "replies": [], "depth": 1}, {"id": "ewgna4f", "text": "Think of it as having your credit checked when you put in your application for an apartment.  The LL wants to know that you'll be able to fulfill your side of the contract.", "replies": [], "depth": 1}, {"id": "ewgnip6", "text": "Depends on the tenant. Small Mom &amp; Pop tenants usually have to provide it. Large privately held companies don\u2019t always provide it. It\u2019s a negotiation point in the lease. It\u2019s not unreasonable for them to request it but not all tenants will give them out. Some landlords might not sign a deal without it though.", "replies": [], "depth": 1}, {"id": "ewgv5lf", "text": "Yes. Depending on the type of tenant and/or amount of finish out money the Landlord will put into the space, I generally ask for 2 years of previous financial statements. No financial statements, no deal. Every now and again there would be a tenant that I\u2019d let slide, but I\u2019d tax them to high heavens with a double or triple deposit, higher rent and no finish-out.", "replies": [], "depth": 1}, {"id": "ewh2eu2", "text": "Yes", "replies": [], "depth": 1}, {"id": "ewh363u", "text": "Its possible it may even be a requirement of the lender.  Lenders can require the borrower meet certain covenants to meet loan obligations.  They can even ask for tenants to make deposits into bank accounts held by the lender.", "replies": [], "depth": 1}, {"id": "ewh3ajm", "text": "I require it no matter the size of the deal.", "replies": [], "depth": 1}, {"id": "ewhdcae", "text": "Once? Yes. Annually? Nope. Red flag.", "replies": [{"id": "ewhdpfi", "text": "Any idea red flag for what ?", "replies": [], "depth": 2}, {"id": "exg2hd0", "text": "Why would it be a red flag? could you pls elaborate that? \n\nThanks", "replies": [], "depth": 2}], "depth": 1}]