It’s Law – Episode 12: Renting Space for Your Business: Issues in Leasing Feb 8, 2024

It’s Law – Episode 12: Renting Space for Your Business: Issues in Leasing Feb 8, 2024

| News & Updates

00:05
Good morning or afternoon, or I guess anytime you’re actually joining us, we’re so happy to have you listening. Welcome to Fr law groups podcast. My name is Rita Gara. And I’m an attorney with the FR Law Group and I’m joined today by our newest addition Tablas, seri. Welcome to our lager with Andrew curse podcast,

00:25
so much. Great to be here.

00:27
We are so excited to have you here. And we’re going to talk today about renting a space for your business on issues that can arise in leasing. But before we get started, I thought it’d be a good idea if you can maybe introduce yourself and tell us how you ended up at Fr. Law

00:43
Group. Yeah, absolutely. So I went to ASU undergrad went to ASU law school, I kind of always knew I was going to be an attorney since I was a child. I’m not really sure why I just thought it was a very interesting career path. But then as I grew up and kind of got introduced to it a little bit more, I realized that this is a great job. And very interesting, very fun. I like how you kind of see kind of work every day kind of solving a puzzle a little bit. So I really enjoy that part. And I was actually born in Albania. And one of the main reasons why my family moved here was so I could pursue a career in the legal fields. Very cool. I’m very happy to be here. And I’m really enjoying my experience with that for a large group so far,

01:34
that’s awesome. Well, let’s get started on our fun topic today. You know, one of the things we do here at fr Law Group is we assist business owners with issues that might arise out of contracts they’ve entered into, and this can come in many forms. It could be maybe an insurance company isn’t honoring a term of a contract or isn’t paying on a claim, maybe something went wrong on a building contract. But today, we’re going to talk specifically about that business owner who’s looking for a space to rent. And it could be either you’re a first time business owner, and you’re getting your first space, or many companies experienced growing pains, and they need to move from, you know, an existing lease into a new one. And there are lots of pitfalls along the way that you can kind of fall into. And so we thought it would be a really good idea to discuss maybe some of the things to look out for the various stages, the formation of the lease, things that can go wrong during the term of the lease and what to do, if you’re at the end of your rope, and you can’t really resolve things with your landlord. So today, I thought maybe we could talk about these issues. And I know that you’ve had some experience helping out some clients with issues exactly, or arising exactly from those very things. Yes,

02:58
absolutely. And there are all sorts of problems and issues that can arise from this kind of landlord tenant relationship. And I think the best thing that someone can do is get familiar with a contract with the provisions of the contract. And if you have difficulty understanding kind of what you’re getting into, or you don’t know how to make sure that your wants are represented in the contract, one of the best things they can do is contact an attorney sooner rather than later, it will be easier for them to be able to help you and better for you long term as well.

03:36
I think that’s such a good point. Because I think that oftentimes, we get involved at a point where a lot of damage has already been done or actions have been taken that might define the way a case is going to take. So I think kind of you’ve touched on it. Let’s talk about specifically issues that might arise during the formation period. And how having the advice of an attorney at that stage when you’re just engaging in negotiations can happen. I think I’m surprised by you know, the number of people who you forget, sometimes I’m not everybody’s you know, being a lawyer, you get to see the problems that arise day after day after day. If this is your first lease you don’t know even know the things to look out for. So if you don’t know which things might be negotiable, for example, that can really affect your position and the benefits that you have stemming from the contract. So what are what would be maybe let’s start with one of the biggest things you think it’s an issue that you want to pay attention to or would need advice from right from the get go.

04:41
So I think with commercial leases, especially, it’s very important that you’re well aware of what you’re getting yourself into because unlike residential leases, which have more protection for the renter, commercial releases usually do not they’re usually drafted by the landlord. They represent his or her earned interests more. So the law tries to stay out of business contracts more than residential leases. So it’s very imperative that your interests are also protected as well, not just the landlord’s. That’s really important

05:18
because I think there is a lot more legislation protecting like, if you know, you’re renting an apartment, residential lease, there are a lot more protections and oversight of what the landlord does. Whereas in commercial, they kind of just let you contract, right to whatever you want to, you know, contract you with some limitations, right. And

05:37
I think one of the ways to kind of combat this is make sure that material terms or terms that are important to you, that are significant for your business, are represented in the lease, as well.

05:50
So what so give me an example of or what do you mean by material terms? Yes,

05:54
so material terms are typically terms that are of significant, significant importance to you. So this can be rents, it can be how many parking spaces you want, maybe costs to redesign your space. One thing specifically that I can remember is, let’s say, for example, that you want a sign for your business, and you maybe want it facing east or west, depending on how much traffic that area, the front of the building, right, yeah, right. Depending on how much traffic the area gets, maybe you think that it will bring in more clients, this is something that is important to you, if that is not reflected on the lease, however, if you don’t, purposely say on the lease that I want the sine facing east, so versus

06:52
West, yeah, right. Later

06:54
on, that could be an issue, maybe the landlord would, will give that side to another person. And that was very important to you, but you didn’t define it in the contract. And you’re gonna have to go over and litigate that or have a dispute over which side a side effect is facing, which you, it’s something that you don’t want to argue about the back end exactly fit or on to just face it head on from the beginning,

07:23
you know, that’s it signage is a it’s an interesting thing. And it’s actually can be really important to a client, I had a case where signage was an issue. And there were a couple issues that this came through a number one, they wanted a big sign, like on the top of, you know, one of the faces of the buildings, they also wanted certain signage to help you know, in some in depending on on, you know, the size of the building and the layout of the building, it can be really confusing for a customer to find where you’re at. And the the last thing you do is you want is want to make it difficult for somebody to be able to find you. And so in addition to winning that big sign, they wanted signage at the front to kind of, you know, I don’t know whether it’s gonna be an error, or whatever it was, but signage to lead them more clearly to where their location was. But that particular part hadn’t been in the contract. And so they ended up, you know, having this fight, and ultimately, there were a couple other issues. But yeah, I can see where that would be really important. Now, it’s interesting, you talk about how important is to get material terms in writing. I know that we have seen situations where some people and it seems hard to believe, but it happens more than you would think where some people enter into lease without a written contract at all. It’s maybe you knew that somebody may you know, who knows how these handshake deals happen, but you don’t even have a contract. I’m curious, you know about that with respect to for example. You don’t have a written contract. One of I would think a huge material term is the term of the contract. We see these commercial leases, typically having longer terms and say a residential lease of one year. Does that give the landlord any benefit? If it’s not in writing in terms of are they able to evict you easier? Yes,

09:13
so as a matter of fact, if it’s a month to month business tenancy, it may be terminated by the landlord after a 10 day written notice so

09:23
can they read? No. So that’s gonna mean you it doesn’t take a genius to figure out that could be a huge issue later, huge issue to have to pack up and leave and can impact your business base. Huge. Yeah. So I think one of the themes of our podcast today is going to be Neverland builder provisions, but make sure they’re written down and that’s just one big one example of many that could be could give you some pretty negative consequences. I wanted to talk a little bit about I’ve seen this come up in a number of situations. Really important to understand is this idea of having a personal gain aren t in a contract, a personal guarantee would be, essentially, you know, who are the parties to the contract, you have to know who the parties of the contract are. So let’s say you have ABC business, and you want to rent the space from landlord, you know, Bob, and landlord, Bob says, I’m not going to enter into this lease with you, unless you’re assigning it, you know, on your personal capacity to, what that really means is you’re putting your personal assets on the line in addition to your business assets. That means that if, for example, you breached the contract by not paying your rent, not only can he come after the assets of the business, but he can come after your personal assets, for obvious reason, do you really need to know what’s on the line? The I think the best thing is to not give a personal guarantee, protect yourself protect your digital assets. But sometimes you may not be able to get a deal done without that personal guarantee, depending on your business’s history or financial situation. So I think one of the things that we’ll be talking about in this will be one of those areas. And you would kind of mentioned in terms of negotiating a contract, this would be an area that would be helpful to have advice upfront to understand what you can and cannot do. If you’re being told that the space you want, you can’t enter into a contract unless you’re guaranteeing it personally, if you’re in that situation, there are some things you can do to limit your personal liability. Common ways you can do this, if you can negotiate it would be you can negotiate a cap on your liability. So let’s say the value of the lease is $500,000, you can negotiate. Okay, I agreed to be personally liable, but only up to say $100,000 or $200,000, whatever, you know, you’re able to negotiate or you could do it as a percentage. You know, if you know there’s non performance on the part of the renter, you’ll only be liable up to you know, 30% of the value of the contract, obviously, you want to negotiate the best deal you can but those are some ways you can limit the dangerous impact of a personal guarantee, the other thing you can do is negotiate either the phasing out of the guarantees. So the length of the contract is five years, the end of the personal guarantee will phase out after you know successful performance at the two year mark, or you have a clause in there that will allow you to renegotiate that specific term. So that would be something that would be really important to understand. And you know, sometimes the way people get in trouble is, you know, not understanding. You know, we have to sign documents all the time, your you know, whether you’re signing, you know, whatever kind of contract, you see a signature line you see your name, you have to understand, you know, many people, as the owner of the business there used to sign your name as the owner of the business, you just want to make sure when you put your name down on that contract that you’re doing it as you know, President of ABC company, not, you know, Riddick, Gary and her individual capacity, we had a client who had no intention of personally guaranteeing the contract. And the other party had slipped a signature that represented just him as an individual, and he didn’t pick up on it and, and just signed it. And then they ended up arguing about whether or not that was intentional or not. So you want to stay away from things like that you want to really make sure you understand. Everything in that contract is why it can be so helpful to have the advice of an attorney because if you’ve ever whether it’s business space or searching for a house, you know, especially a business owner, especially if you’re whether it’s a new business or an existing business, the amount of stress and chaos that comes with trying to find a space and move it it’s helpful to have an outsider come in and take a look and who’s skilled at looking for those things. So I think that’s, that’s something that’s really important to kind of be aware of and negotiate if you can, but other than that, what other things have you noticed that are kind of pitfalls to look out for with respect to leasing.

14:32
That’s great information. By the way, I do want to add that if it’s if something is important to you and you’re unable to negotiate that particular term, maybe the landlord is being difficult, never know what you’re going to deal with. Sometimes your best move is to just walk away and not signed the contract. I think it will save you a lot more money and time if from the beginning. You know what you want and you stick to it rather than not being sure. And going through that, and then having to deal with the issues they later on. And I want

15:06
to add that that’s a good point, the

15:09
way that a landlord behaves during negotiations will oftentimes be a good indicator of how they will act, when issues do start to arise. So keep that in mind when you’re talking to someone, when you’re about to enter into a contract with someone, make sure that there’s a good relationship and that you can trust them to handle things. That’s such great

15:31
advice, you know, yeah. Are they responsive to emails? Do they? How many times do you have to put something in the contract? I think that’s really good advice. And as with anything, I again, I’d liken it to buying a home home, even with a business, you can get emotionally attached to something. And I think that’s absolutely right. If you’re gonna, if you’re locking into a longer term lease, you don’t want to be bound by provisions that you really didn’t want to get stuck with. So sometimes, as frustrating as it can be, you walk away Exactly.

15:58
And a lot of these leases, they will surpass one year, so there’ll be for a long time. So if you’re in a contract that you’re not happy with, and you have to break it, that will be more costly to you. And more difficult than if you just didn’t enter to begin with. So just make sure you’re well informed, you know, what you want. And if you don’t know how to go about it, talk to an attorney. So you can deal with things in the front end, rather than the back end.

16:29
So I would imagine, speaking of material terms, that rent is a material term. Would you agree with that? Yeah, that’s probably what most people they see a space, it’s a visual will handle my business needs. And the next thing is how much it’s gonna cost me. Okay, before we jump back off the talking about material terms, and what’s important, I did want to touch on one of the thing, which is, and I think it’s something that probably most people care about, they go to see the space, they want to know if it works for them, Does it suit their business needs, but also, then it’s what is the rent, that’s, you know, give me the price tag. And, you know, I was noticing, and I don’t know if you’ve noticed they’ve been doing this on I’ve heard people complain about it with apartments and things like that, too. It’s not just your rent, you get they have like, wasted valet they call it where somebody, you’re paying for somebody to pick up your garbage, you’re paying for cable, whether you want it or not. There’s all these added costs. So we see that in commercial leases, to where, and it’s interesting, sometimes a landlord when they’re negotiating, they won’t even get to these extra pass down costs until you’ve agreed on rent price. But it’s really important for you to understand what your bottom line is going to be. So I just wanted to talk about some of the different types of costs that are passed down to you from the landlord. We’ve seen costs, including things like insurance costs taxes, I think when you are renting from a place that has multiple businesses renting from that particular landlord, and it has common areas, you might get dinged with costs for maintaining those common areas. Operating costs are often shared by the tenants on a pro rata basis. For example, you rent a space with 15 other renters and you’re going to have you pitch in for structural elements and other business systems, or building systems, whether it’s plumbing or, you know, a jack, all those things. And so how you might see it, for example, as they might say, you know, we calculate our operating costs from last year, anything that goes above last year’s costs, everybody splits in a pro rata share, you know, depending on the state of the building, the level of maintenance and care that the landlord takes with this ability, I mean, these can add up to a significant, a significant amount of money. So that will be added to your bottom line, that would be a material term that you’re going to care very much about. You don’t nobody likes money surprises. So something to keep in mind. You know, what are those hidden costs and make sure they’re not hidden? I think unless you have anything else I’m gonna move on. I think there’s a lot of lot of things to talk about with respect to issues that might arise during the lease, what kinds of things do we see from either party where, you know, they’re they’re not performing or they’re breaching provisions of the lease. So what are some what are some things that you’ve seen that are worth talking about? In terms of issues that arise from a business lease, yes. So

20:02
if you fail to pay rent or breach any other part of the lease, the landlord has the right to reenter the premises and take possession without any warning. This happens very frequently. And in fact, disputes concerning rent are sometimes the most frequently seen and problematic disputes that we see. And those legal districts are going to cost you significantly more than the rent. Would you begin, you

20:36
just made the point? Yeah, there’s, if you’re already in the hole, the hole just got a lot bigger. Exactly.

20:41
And, in fact, I was just recently working on a case where this exact same thing happened. And not only did the landlord reenter the premises, without any warning, but they took all of their the tenants property, and sold it to pay the rent, the past due rent. And that’s

21:04
something that a landlord, I think that’s really important for people to understand that something not only can they enter the premises without permission or warning if you have breached it, but they can use your business assets to settle the debt that, under certain circumstances, this

21:22
is a lot of this is something that a lot of people don’t realize, unless it’s an exempt property, they can pretty much take everything that you have inside and just sell it to be able to pay the rent.

21:34
Okay, so we’ve talked a lot about some issues that can come up during the formation of the lease, but obviously, a lot of the meat potatoes here comes from things that happen during the lease. So let’s talk about maybe some issues we’ve seen that, you know, kind of bubble up from things that maybe the contract could have prevented, or things that you should be aware of that could happen potentially, what are some things that you’ve seen can happen, because of one side, or the other is non performance. So

22:08
if you fail to pay rent, or breach any other part of the lease, the landlord may be able to re enter the premises. And this happens quite frequently. And in fact, disputes surrounding rent or failure to pay rent are probably one of the most common ones that we see. So like when you say enter the property

22:29
that you know, he’s not knocking on the door waiting. Yes,

22:33
he without your permission, without any warning, he’ll just go into the property and take possession again, of the property and not let you within the premises. So you’ve kind of lost not only the premise, but I’m sorry, the place of business, but you oftentimes also lose whatever property you have inside because what a lot of people fail to realize that once the landlord re enters the property, they can sell any, any items that you have inside to be able to pay for the past due rent.

23:13
So in certain circumstances, if you’re not living up to your end of the bargain, they can actually use your business assets to satisfy the rent payments you were supposed to gain. So I can see where that would be a huge concern to a business owner. Have you ever actually seen that happen? Many,

23:30
many times. And just recently, I had a case where this happens. Where this happened, they enter the premises. They sold pretty much everything that was inside and even a desk with important information in it. And we there was stuff

23:47
in the desk that they sold over yet.

23:50
Ooh, desk and the items that were within the desks were kind of lost with the sale Yes. So it’s just something to think about because oftentimes the legal disputes over rent are going to cost you way way more than just paying the rent to begin with.

24:11
Well I just the dust thing that’s kind of a that’s a really scary example of what can happen and who knows what you know what kind of important documents or other items you might have had in there that good luck getting back. That’s that’s a really important exam to understand.

24:29
Even if you go to court over it and fight over the fact that the landlord lost you important business documents, those documents may still oftentimes be gone. So disappear. Exactly. So even if you were to go to court over it, it’s still something that you probably are most likely cannot get back. So the hassle of trying to get them back and you might never see them again as well.

24:58
Yeah, I think, you know, it’s certainly rent is always going to be a big issue payment of rent non payment of rent, the landlord actually has some obligations to if you’re if you’ve got some good provisions in your lease, the landlord should have some obligation specifically, you know, they have an obligation to make sure that necessary repairs are done to the building and make sure the building is in a habitable condition, they have to comply with building codes, they have to keep common areas clean and safe, repair building systems and structural elements, the building any parking areas, common areas, you know, you see examples of this, you know, a broken window that remains on repaired and that’s going to be a worry for a business owner, you worry about access, you worry about crime, because of, you know, the opportunity to access a building, and just the the overall look of it. So those kinds of things are things you want to hold your landlord accountable for, but it is important to know and again, this goes back to getting advice from the beginning, because you want those protective provisions in there. But you also need to understand, if you have an issue, let’s say your landlord isn’t holding up his end of the bargain and keeping those common areas safer, well maintained, what do you do, and most of these leasing contracts are going to have a provision in there that lay out the process for escalating an issue like that. And if you don’t follow the process that you’ve agreed to, in your contract, you can sometimes lose the opportunity to address those issues. For example, typically, in the lease, the lease is going to require that you provide your landlord with written notice of what you’re alleging their nonperformance up. And so it’s not okay to give, you know, a call that won’t satisfy the terms of your lease. So written notice, specifically describing exactly what you believe they have not performed. And that’s important, because the landlord typically is going to be provided an opportunity to cure that non-performance. And typically, the lease will include language, that will identify a timeframe within which they have to cure that. And so you have to understand that process, because sometimes, we try to casually resolve things, but if that clock is ticking, and by the time you really get upset about it, you realize, oh, I have to go through this horrible process and waiting period, you might get really aggravated, and it might really impact your business. So it’s important to know upfront how to handle an issue, if it arises and look for those escalation provisions in your lease. You know, there are going to be some repairs that the landlord isn’t going to be obligated to make if you haven’t negotiated that in your in your contract. And it depends on what type of property or leasing is it you know, we see a lot of businesses renting out a home and they run the home, you know, the business don’t have like a home like structure. Or you could be in a building that has multiple floors and multiple tenants. And so who are responsible for what repairs who can put up what lighting, there are going to be some uniformity requirements, at least might have an a building that has, you know, multiple units, they don’t want everybody doing their own style light fixture and sign it. So all those things are going to be important. But also remember going back back to your obligation as a renter, you’re gonna have an obligation to return that property back and you know, good order other than like the typical wear and tear. So important to keep that in mind as well. Which kind of raises another idea what happens if you are ready to be so excited, you’ve had your attorney, look over the lease, you’ve negotiated those good provisions, then you show up on day one to move your stuff and then your space is not ready for you or it’s not in good condition. That

29:13
could definitely happen. Sometimes the premises are just uninhabitable. And people can’t conduct the business that they were expecting to conduct anymore. Maybe they entered into the property and it was not in the condition that was reflected or stated in the contract or said that it was going to be by the landlord. So there’s a couple of couple of different options here. You can first look at the contract or the lease and look at what the provision say.

29:46
Similar to what we were just talking about those escalation provisions.

29:50
Yes, yeah. And some contracts will have provisions that say that in the event of a substantial defect the tenant must inform I’m the landlord of the defect defect and give them the opportunity to cure or repair within a certain amount of time. And this reminds me of a case that I had where the one of the provisions in the lease that said, if there was ever any significant defect, the tenant had to give the landlord a 30. day notice, just notify them that, hey, this is not what I expected. There’s this, the property needs repairs. In that case, if the landlord doesn’t within 30 days do and they’re not responsive, they don’t do anything. To fix it, they don’t come and inspect, usually, they’ll come in inspect and see what they can do. If nothing happens within 30 days, then you can think about what to do from there. But you have to look at the contract and see if there’s a provision that requires you to give the landlord notice.

31:03
So that would apply, like we talked about with the common areas, but also with your own space as

31:07
well, yes, yes. And then if the lease is silent, you can always just try to talk to the landlord. And this kind of goes back to what we talked about in the beginning, where it’s important to think about what kind of a person you’re entering into a contract with, because later on, issues may arise, and you may have to continue negotiating or talking about something. And if you’re dealing with a difficult landlord, if there is an issue like this, where you have to repair or fix a defect within the property, you want to make sure that you’re talking to someone who’s willing to help and willing to be a good landlord, basically. So yes, you can always try to work it out with the landlord first, and then try to get as much communication as you can, and writing

32:00
who’s gonna get the documentation and talk about this documentation. So documentation

32:04
is everything. So make sure most of the writing or if you can, all the writing is over email is written down. So helpful. Yes. You just don’t know what you’re going to do within the future. And you don’t want to deal with it. He said, she said, situation. So make sure that you have everything documented. Take pictures, take lots of pictures of the damages. Pictures are huge. Yes. And you always want to trail in this in these situations, because if there’s ever any disputes or litigation that arises, that trail will help you make sure that things are worked out how they shouldn’t be, because

32:46
I can imagine, you know, and I’ve seen in cases where there’s a dispute over who caused the damage. And so yeah, pictures can sometimes help tell that story because they could come after the tenant for damages as well. Right. Yeah. Yeah. And

33:02
that the emails between you and the landlord will help as well. It will show did you contact them within a reasonable reasonable time? Was it stated in the email that you found it this way? What did they say in return? This is all going to be important, especially what we do here a lot with we write demand letters, which kind of helps speed up if there’s any issues and

33:27
can explain maybe what a demand letter? Yes, yes.

33:30
So a demand letter, you’re trying to elevate the stakes a little bit. So we’re stating our case, why we think they’re in the breach of the lease and kind of asking them to fix it before it goes into further litigation, or, yeah, as to it gets bigger and bigger

33:50
and bigger. Sometimes when you’re trying to work something out. And it doesn’t work sometimes having the name of a law firm on a letterhead. Yes. helps move things along. Yes. Before you get to that litigation stage, I think that’s a good point. What about I think it’s an interesting with respect to I oftentimes think of this in terms of residential leases, but it happens in business leases, too. What about the idea of sub leasing? Does that happen? And you see that and commercial leases and maybe talk about that a little bit? So they gets interesting, like, I get again, like I see it more in residential. That’s where my familiarity is with it. But I can certainly imagine a situation where, especially if you’re talking about like a new business, a new business comes in, and maybe doesn’t. The renting a smaller space, because budget is a concern. And you know, you don’t really know what your projectiles are. And then all of a sudden, year in month three, good fortune is hit and you’re booming and you need a bigger space. So you need to move out but you’ve signed a fight five year lease, is there. Are there options for sub leasing?

35:05
Yes. So I think it’s sub leasing and assigning the contract is a great thing to consider. Because it oftentimes may be cheaper for you to just or less problematic. It’s just so signed the lease to someone else rather than break the lease which could come with a whole span of Yes, right. Um, so in Arizona, a commercial tenant has the ability to sublease or assign the contract to someone else, unless it’s expressly stated in the lease not to do so. This was, please look at the lease and see what it says. And if it says that if there’s nothing there that mentions that you can’t assign you can’t sublease to someone else. Consider doing that, and it might help them even proactively

35:50
even if it’s silent, have something proactively states, it’s not against the terms of the contract to do that, give me that, right. Yes. And

35:58
that might often times just help you solve a problem and not have to, and will make you break the lease which will cause a hallmark a whole lot more expenses. Yeah, problems, stress, and losses.

36:16
I think I think that really ties back to our theme of getting advice in the beginning and take care of these things. We see it a lot. And I think I think there’s a number of reasons why it happens. Number one, sometimes it’s something that feels like a big deal to get a lawyer involved and you want to you want to try to work things out, or it’s the expensive and attorney. But I think that, you know, even understanding, you know, given a call saying, hey, is this something that’s actionable? Is there something here at the beginning, it doesn’t mean you have to act right away, you know, we obviously, if there’s an action, you want to understand the statute of limitations, so you’re not barred from bringing a claim later, something else an attorney can help you with. That’s why it’s always good to pick up that phone. If you don’t have somebody that you regularly use. Many offices offer a law visit offer a free consultation or a 30 minute consultation. So you can kind of see whether this is something you want to spend a little bit of money on and delve in further. Certainly utilizing the advice of an attorney and then beginning to get all those good protective provisions in your contract could help you, you know, there’s a little bit of an expense at the front, but to protect you from having to litigate these matters in court on the back end, where we have all kinds of expenses and risks that you’re exposed to. So I think that

37:44
yes, I was going to say that sometimes the landlord is just unresponsive. So typically, a good demand letter will kind of point things in the right direction and get that response, get that response definitely, and maybe, hopefully fix things before they ever have to escalate.

38:01
Yeah, yeah, I think that’s a good point. Okay, so we’ve talked about issues relating to the formation of the contract have also gone over, you know, issues that arise during the term of the lease. But what happens if you can’t resolve the demand letter doesn’t resolve the problem and your, your attempts at communicating with the landlord doesn’t solve your problems? What do you do? And one of the things again, it goes back to the formation and making sure you get the provisions in your contract that you want. One of the things that could be within that lease is something that determines how you will litigate any issues that arise. We see this, for example, there might be a provision that mandates mediation, or arbitration instead of litigation in a court of law. And there are pros and cons to some of these issues. But it’s an issue that you don’t want to make uninformed. You want to be aware if there’s an issue like that in your lease and make sure you understand how that could impact the legal route your case will go if you have if you have these issues. Again, consulting with an attorney, getting that free consultation or getting that advice is going to be really important. But another thing, as you know, you as a business owner, go about your busy day of life, making that business run and be profitable, don’t ignore legal notices, or any kind of document that looks formal and pertains to release or your performance. I don’t know ignore anything. If you get anything from the landlord that has some sort of demand of its own or some sort of allegation that you have not been performing your part. You don’t want to wait Jumping on that. And it seems kind of like an obvious thing to say. However, we have seen situations whether somebody either inadvertently puts to the side or, or for whatever reason is is, just doesn’t address it. And I think you’ve, you’ve dealt with the consequences of that maybe you could talk about that a little bit.

40:19
Yeah. And like you said, it could be, maybe you’re busy, you’re busy running a business, but sometimes life gets in the way. And there’s there might be personal issues, or medical issues. And this is something that I dealt with recently, a client, as soon as they were served with a complaint for a lease dispute, so failing to pay rent, they sell ill, and they kind of they tried to deal with it in the beginning, they come to the law firm. But after that, they kind of put it to the side because they weren’t feeling well, they were dealing with medical issues. And the unfortunate thing is, in these situations, the matter can go on without you if you kind of let it go and don’t respond, don’t do anything about it. So it’s just important to keep in mind that as much as we might deal with difficult times in our lives and medical issues in this case, it’s just important to make sure that you’re following that, that lawsuit, and you’re not letting it go, because a lot of actions can happen in your absence that can affect your business and the other party may move for default judgment, which the court may grant. And that would be can be very difficult to vacate. So

41:46
you have that. Yeah, I think yes, that’s that’s a good point. If a complaint has been filed against you don’t put off getting getting representation. If you don’t file an answer within the time provided by our civil rules, the other party can move for a default judgment against you, basically, means they’ve won their case, and they can move for judgment. And if you don’t have a good reason as to why you didn’t answer in time, you may lose the opportunity to address those issues with the court. So really important not to ignore anything that alleges anything. And that that you pertaining to the contract haven’t done, you know, get advice on that. Document everything, as we talked about emails, pictures are important. And keep everything Yes. We don’t want to get accused of spoliation spoliation. Basically, if you are aware that there is an issue arising out of the contract, you are required to keep things that could potentially be evidence in the case and they can be used against you, if you don’t hang on to those things also might prevent you from being able to prove an important part in your case. So it’s really important to document document document and, and hang on to things that are relevant to the issues you were having.

43:11
If you see if it’s a physical problem with the property take lots of pictures. One of our clients was dealing with mold issues when they entered into the promise the premises and having those pictures being able to see where the issue was was very, very helpful.

43:29
Yeah, I think I think we’ve covered a lot of a lot of the potential pitfalls. There are always going to be things that arise, they’re really common. These are really common issues. You know, the goal, obviously, is to get them resolved without the need to go to court. But if you you can prevent a lot of these situations from happening with a well drafted lease contract. So that’s I think, where you want to start, but I think we were going to wrap up for today. Thank you so much for joining us. We’re happy to have you listening, and we’ll see you next time.