Landlord's Recommended Role to Mitigate Damages for Leases
Once a 3-day notice to pay or quit that is for past due rent is served to a tenant, the landlord may anticipate a vacancy. In some cases the default of the lease is corrected and the lease goes on. However, the vacancy will most likely be imminent if the tenant does not answer the complaint or pay the back rent.
The list below is my expert recommendation to landlords, as a result of a default notice to pay or quit. This list is to provide the necessary steps to release the premises in the shortest time possible and reduce the damages in a potential lawsuit.
1. Inspect the premises as soon as possible to assess any damages to the property.
2. Contact contractors and obtain at least two bids for each service to cleanup if access is gained into the building.
3. Make the place suitable for showing to prospective tenants.
4. Find the real estate agent who is most familiar with the market area. It is essential that the agent is a specialist in the area. Don’t make a mistake and employ a friend who is a broker unfamiliar with the local market.
5. The commercial real estate agent must create a written marketing plan to get the building leased as soon as possible. Request that the agent make suggestions for incentives to lease the property even faster. The agent should be knowledgeable and suggest contractors to hire for cleanup. In addition, he should provide the “right” leasing rate to quickly attract a tenant. Do not request a higher rate from the new tenant in order to reduce damages from the former tenant. In addition, the listing agreement should be only for 120 days or less in case the broker is not a good fit.
6. Once an offer is received by a financially qualified tenant whose use fits the use of the building, the landlord should secure the tenant. It is in the best interest of all parties to make sure the owner has acted responsibly and secures the tenant in case there is a lawsuit.
These six steps will provide an adequate defense for the landlord in the event of a lawsuit.