Lease renewal: My father and I own 2 Dairy Queen’s. We are currently signing a new lease for 5 year’s. We missed the option to renew it on the option of two 5 year leases, so we’re stuck with just one 5 year lease and whatever terms they give us.
My father and I own 2 Dairy Queen’s. We are currently signing a new lease for 5 year’s. We missed the option to renew it on the option of two 5 year leases, so we’re stuck with just one 5 year lease and whatever terms they give us. I’m actually licensed in real estate but only have done 3 residential transactions. I see in the lease agreement mentioning we have no broker. Can I just jump in and represent ourselves under Keller Williams &amp; earn a commission out of this?
[{"id": "i094jbj", "text": "You\u2019re never stuck. If you missed your options then you can always negotiate a brand new lease with options down the road. That\u2019s being said, it would likely excluded any built in pricing that existed (though I\u2019d assume that was already a waived). Per the commission, was there ever an LOI? Or was this mainly through phone calls and emails? The proper thing to have done would have been to notify during the process that you were working on behalf as a broker and an owner. That being said there\u2019s nothing wrong about inserting brokerage language within the lease when you are going through legal review.", "replies": [{"id": "i09gb6b", "text": "I agree\n\nUnless that site is ready for redevelopment / change of use, they will likely want to negotiate with you on a new term.\n\nPretty much, getting rid of the options gives the landlord flexibility to 'do something else' with three land, but chances are that they want to keep renting to you even if there aren't options you can still likely rent the space, it just isn't guaranteed.\n\nMake sure to research comparables going into the lease negotiations. It is expensive for both landlords and tenants when a tenant moves. The tenant has demolition costs on the old space, moving costs, and renovation costs on their new space. The landlord has vacancy costs (opportunity costs) and may have to cover additional costs like maintenance, taxes, and insurance. Meanwhile a new tenancy will sometimes require additional free rent or tenant improvement allowance etc, of course there are significant leading commissions as well.", "replies": [], "depth": 2}, {"id": "i09h3ug", "text": "&gt;The proper thing to have done would have been to notify during the process that you were working on behalf as a broker and an owner.\n\nA Tenant cannot represent themselves as a broker.  It's one or the other.", "replies": [{"id": "i09p5nv", "text": "This is either a local law specific to your market, your looking too deep into the technical aspect of it, or plain wrong as I suspect. I have seen tenants receive brokerage fees many, many times. Including real estate brokerages leasing their own office space in which they are literally both the tenant rep broker and the tenant.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "i09gu6u", "text": "No, you cannot be paid a commission as a broker when you are also the Tenant.  Not only is it unethical, it's a great method to irritate your Landlord.", "replies": [{"id": "i09mixm", "text": "This is definitely not true. You can absolutely be paid a commission when you are involved in the deal both in residential and commercial. Maybe its state dependent but most everywhere I have seen you can.", "replies": [], "depth": 2}, {"id": "i09r7s7", "text": "People do this. It\u2019s not ethical but it happens around the country. Or their \u201cfriend\u201d represents them.", "replies": [], "depth": 2}], "depth": 1}, {"id": "i09zu1o", "text": "Are the two locations coterminous? Same landlord? What other options do you have in the markets for remotely similar space? Any vacant fast food locations nearby? Does the landlord have plans for the space or is the size such that it might be difficult to find another tenant?\n\nI take it the option period in the lease required the tenant (you) to notify within a specific period of time otherwise the lease terminates at the end of the period and you vacate?  \n\nRight or wrong, introducing the commission won't buy you much in the deal. You might consider finding a highly qualified retail/restaurant (commercial only, no residential) who can help create a market for you as a two-store tenant and find some options.", "replies": [], "depth": 1}, {"id": "i0aeqwr", "text": "Ask someone at Keller Williams? If you think you\u2019re getting a good deal, I wouldn\u2019t bring up the commission. All they will do is roll whatever they pay you into some other part of the deal. Higher rate, less free rent , less TI\u2026", "replies": [], "depth": 1}, {"id": "i0aghs8", "text": "I'd be more worried about not locking in a new lease with good terms at the same location.", "replies": [], "depth": 1}, {"id": "i0ajton", "text": "Did they turn the blizzard upside down when they presented terms? It\u2019s free if not", "replies": [{"id": "i0ekqny", "text": "That does bring up a good question, is a Dairy Queen that is upside down in their mortgage better than those that are not?", "replies": [], "depth": 2}], "depth": 1}, {"id": "i0b9tc7", "text": "A. The best tenant is the one they\u2019ve got. They\u2019ll negotiate. You have leverage. Do a new lease. You might get options too. Don\u2019t be scared!\n\nB. I don\u2019t know that I\u2019d step in for a commission. Leave it out and point it out to them when you counter with more/better terms you want. \n\nC. You have a bad landlord.", "replies": [], "depth": 1}]