Broker and I were confronted by tenant during showing
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[{"id": "fgbf0uy", "text": "Curious how this goes down.\n\nI\u2019ve leased some retail spaces before, but the landlord and tenant had already agreed they\u2019d part ways at the end of the lease. I didn\u2019t tour anyone through until that had been confirmed.\n\nDon\u2019t know the landlord / tenant relationship here, but worth considering that this landlord might do the same thing to you as a tenant later on. Even if this isn\u2019t a negotiating tactic, it\u2019s a bad look for the LL.\n\nedit: Not uncommon (in residential) to have a clause that states you\u2019re owed ${exorbitant} each day after {reasonable date} that you don\u2019t have unfettered access to a white-boxed space. Useful approach if you think he\u2019s negotiating with you in bad faith but otherwise like the property.", "replies": [{"id": "fgbfeql", "text": "Yea it was a little strange to be honest. The tenant has been there is say at least 15 years. I was def set back. I know the landlord is quite old, lives in a different state. I just don't know if or how I should ask the broker about this incident. I don't want to dish money out only to be told sorry they renegotiated and now it's not for lease.", "replies": [{"id": "fgc1apq", "text": "If you like it, lease it. If not, just walk.  No need for rigmarole.", "replies": [], "depth": 3}, {"id": "fgc4fu1", "text": "its not your concern what current tenant says.  \nyour concern is whether you want the space. yes yes no no.   there's no $ to dish out now so proceed as if tenant was not there.  very simple matter.", "replies": [], "depth": 3}, {"id": "fgcmhk5", "text": "Have the broker send you the LOI, mark it up to include a clause stating that the LL is not renewing the current tenant\u2019s lease, renegotiating, entering into a new lease, etc. also add a clause acknowledging that the LOI is non-binding, except the previously added clause. Get the LL to sign and you sign. Should be all set. Nothing is 100%, but as someone who has wasted 10s of thousands on leases that have fallen through this is probably the best you can do. \n\nNot sure if this is worth it because of the $ amounts involved, but this is the approach I would take.", "replies": [], "depth": 3}, {"id": "fgdxq7e", "text": "What money are you spending on an LOI?  You don't need an attorney until you're going to lease.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fgc05i1", "text": "The broker should be able to wrote up a basic letter of intent you shouldnt need an attorney for it since its non binding.", "replies": [], "depth": 1}, {"id": "fgc3w9o", "text": "let your broker prepare an offer which is bob binding.  its not a negotiation tactic.  the tenant has not renewed the lease therefore the property is being shown.  you don't know what's going on between tenant and ll and neither does broker. and its not really your concern.  let your broker put together a one page offer at no cost to you. you dont need an attorney for that", "replies": [{"id": "fgc42ti", "text": "non binding", "replies": [], "depth": 2}], "depth": 1}, {"id": "fgcb4yd", "text": "Why would the broker engage in dialogue with the existing tenant about the owner not renewing their lease in front of a prospect? \n\nSounds like there are some communication issues between the landlord and Tenant. \n\nIf the broker did that to them it may happen to you, too.", "replies": [{"id": "fgcbb8q", "text": "The broker I'm sure wasn't the one to do it. The tenant didn't know even who he was.", "replies": [{"id": "fgemyyn", "text": "This may not be applicable, but also realize many commercial landlords are busy people with a lot of interest.  \n\nI had an experience semi like yours the other day.  My client bought a business that came with re and had an issue with a tenant.  The client sent me to view a space in default and give him consultation on fixing it.  Tenant is shocked I'm there to ask questions and tour.\n\nIve done millions of business with that client, he doesnt know those people, pm deals with them.  Whatever I say is important and he is asking me to get involved because he wants a new tenant.\n\nWhile it sounds disorganized what you describe happens.  Tenants also tend to freak out when they play bullshit games and someone shows up to replace them and they realize people arent fucking around.\n\nThey may be using you as leverage on the current tenant for a renewal, or they may want them gone.  Like my other comment said get a broker,\n\nThey assumably have hired a broker to handle this though, whatever issues the current tenant has with them really arent your concern.  They will deal with that.", "replies": [{"id": "fgenhql", "text": "Thank you for this feedback. May I ask when and if I get a broker, compensation wise, is that someone I pay to help? Sorry if this sounds like a dumb question.", "replies": [{"id": "fgfn9ux", "text": "This all depends on the market and broker, but typically 3 or 4% of the value of the lease is paid to the broker by the landlord.  It is common for them to ask you to gaurantee that though as part of their representation.  So if the landlord wont pay, youd then decide to go a different property or pay it yourself", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fgcimo3", "text": "Why are you using the landlords broker?\n\nNo one here can answer that, and they want to lease the space to you or get a renewal.  They dont care about you either way.\n\nHire a broker who can sort this out.\n\nLois can be binding or not and the difference isnt always if it says it is or not.  Either way it still lays out the actual lease terms.  Your lawyer wont negotiate that.  \n\nHire a broker who can understand whats going on here and tell you if you are wasting your time as a negotiation pawn or not, and then hire a lawyer to make sure the business terms they advocate are properly handled in the lease and your liability issues are handled.\n\nWhether you hire a lawyer or not to review your loi is like asking if you should take your car to a mechanic after the engine blows up.", "replies": [{"id": "fgclis5", "text": "I didn't have my own broker. This person had a listing and then presented an additional listing not on market to me.", "replies": [{"id": "fgcvuwa", "text": "I understand.  Im saying get a broker like now.  Explain this entire thing and let them give you other options and help you on this one", "replies": [{"id": "fgcw5wr", "text": "Thanks for the advice.", "replies": [{"id": "fgekhi9", "text": "Just came back to read other replies and it seems you are very averse to having your own representation. Curious to know why that is.\n\nI agree with what u/numnumlobster wrote above.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fgcnozz", "text": "If they have a right to renew it could be messy. If they don't, don't worry about it", "replies": [], "depth": 1}, {"id": "fgd3hve", "text": "If I were in your shoes, submit an LOI\u2014 you have nothing to lose. You don\u2019t need to get an attorney involved to submit the offer, and it will show that broker that you are interested and ready to move on an opportunity. Even if they use it against the current tenant, it will move that process along and you\u2019ll find out if you can move in sooner rather than later. If you get it, great; if not, it will show the broker your serious about getting things moving.", "replies": [{"id": "fgd3xnh", "text": "&gt;nd it will show that broker that you are interested and ready to move on an opportunity. Even if they use it against the current tenant, it will move that process along and you\u2019ll find out if you can move in sooner rather than later. If you get it, great; if not, it will show the broker your serious about getting things moving.\n\nHe has specifically requested information on my concept and was sending this for LL approval. Additionally, he said he was going to get the LL's attorney to send me a LOI.  At this point, would it still be advantageous for me to send a LOI given that he's informed me that the LL's lawyer is doing it?", "replies": [{"id": "fgdaemh", "text": "Why would the landlords attorney send you an LOI?\n\nEdit: spelling", "replies": [{"id": "fgdamgy", "text": "That's their initial proposal and then we review and come back with our offer.", "replies": [{"id": "fgdcza4", "text": "Interesting. Typically I\u2019ve found that there is an ask that the property would be marketed with. If they\u2019re going to prepare a proposal for you to review, let them. See if the numbers make sense, then go back with your offer.  During negotiation, I would ask to see the current lease; make sure the current tenant is leaving, no options, etc.. \n\nObviously you don\u2019t want to be on the hook paying rent for a spot you don\u2019t occupy, but it seems like they are just an ornery tenant. If you like the spot, go through the necessary steps, if something fishy happens down the line you can walk away.\n\nI\u2019d imagine your attorney would state the property needs to be delivered \u201cwhite box, vacant\u201d", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fgd4n3n", "text": "I dunno, did you really like the space / location? \n\nIf so, you may want to go back and talk to the tenant and see if he can show you the lease. If so, you can see right then and there what your options are. \n\nIf you have seen kitchen nightmares, it may be like that, with a delusional tenant who does not quite understand real estate law. \n\nIt could be he has an option to renew, and it could be that he does not. In eigther case, the landlord may pull some last minute shenanigans to get that tenant out, and is that really the type of landlord you want to deal with in the future? \n\nThe current tenant can also do some last minute shenanigans to stay in the place, so it could be that you sign a letter of intent, and the place is not deliverable and you are paying rent for a space you cannot legally occupy due to unlawful detainers, / liz pends bs. \n\nI doubt it is a negotiating tactic for the landlord, they have all the power why bother renegotiating? The tenant can pay or he cannot,. Look for the usual signs of a failed resteraunt, closed on certain days of the week, real spotty yelp reviews ect ect. \n\nDo you have an existing resteraunt? I have seen so many people get fucked by starting one it is not even funny. \n\nHow much did you budget for renovations? Do you have an expiditor? I would see about getting a tenant rep broker in there to negotiate on your behalf, there are many nuances to starting a space, parking, zoning, ada compliance, liquor requirements, grease trap discharge permits, it will save you your sanity later unless you really know what it is you are doing.", "replies": [{"id": "fgd5m0u", "text": "&gt; so many people get fucked by starting one it is not even funny.\n\nThank you for this thoughtful reply. the current space isn't a restaurant. I would need to convert. I have been in the restaurant biz so i know a few things. I will def have a lawyer on hand so that I'm not as you say paying rent unable to access the spot.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fgdckzk", "text": "A few items to note:\n\n1. An LOI is non-binding.  It is not \"can be seem as...\".  It literally is not legally binding.\n2. The LOI should be drafted by your broker or the property owner's broker.  You do not require an attorney to draft an LOI.\n3. It is common for existing Tenants who cannot obtain a new lease to be confrontational.  Let it go.  Business is business.\n\nIf you are interested in the space have the broker draft the LOI and sent to the property owner.  The existing Tenant is of no concern to you.  Whatever issue exists is between the property owner and their Tenant.", "replies": [{"id": "fgdcxe4", "text": "Thank you!", "replies": [], "depth": 2}, {"id": "fge4lkj", "text": "Absolutely agree with all of this. \n  \nRegarding existing tenant, there\u2019s no telling what issues may have existed. He could have a history of delinquencies or some other issue that makes him a problem tenant. A lot of tenants are misinformed when it comes to leasing and instead of reading their lease or learning the trade they complain and demand concessions from landlord with no legal right to do so. \n  \nRegarding LOI, make sure your own broker is calculating out all your costs and landlord costs as you negotiate. If you know what the landlord is looking for you become a much more powerful negotiator as a tenant. Example, have broker spreadsheet out the lease cash flow. Consider landlord\u2019s costs of rent abatements, TI allowance, and commission, and know what month the lease will turn a profit for the landlord.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fgdd59t", "text": "Thank you. Lots of.good  advice here.", "replies": [], "depth": 1}, {"id": "fgdepfp", "text": "*\\0/(TT)(*_*):0:0(*_*):0:'", "replies": [], "depth": 1}, {"id": "fgseggi", "text": "Just an update. It's been around a week and I haven't heard back about a letter of intent. I emailed the broker once and said the landlord may have been away on a cruise. The LOI was sent to the landlord and lawyer for review according to the broker. Does it usually take this long to get an initial proposal?", "replies": [], "depth": 1}]