It's an unfortunate fact that commercial real estate investment dropped by 52% last year to the lowest levels since 2012. Because the commercial real estate environment is changing, it's more vital than ever to practice proper lease enforcement strategies to prevent damage or bad tenants.
Unfortunately, this can be impossible to do if you don't have a good, thought-out lease for your commercial properties.
So what are some ways you can improve lease enforcement? And what should you do if you need help with this? In this guide, we'll answer these questions so you can ensure that your commercial investments remain profitable.
Research Local Laws
Before you even begin crafting a lease the first thing you'll want to do is research the local rental laws where you live. If you reside in Charlotte, you can find them here.
Researching these laws makes sure you're staying within legal guidelines. More importantly, it can help you implement leasing strategies that abide by the current regulations in place.
This can be invaluable for maximizing your investment and protecting the property.
Create an Iron-Tight Lease Agreement
It can be tempting to simply download a lease template that you adopt to your commercial property. However, this simply isn't enough for lease enforcement.
If your terms and conditions aren't laid out in this contract, then any tenant you get has no obligation to follow them.
That's why we recommend partnering with a legal real estate expert to craft an iron-tight lease agreement. Then, use this guide to help you review it.
Perform Regular Inspections
You shouldn't just take your tenant's word that they're taking care of your commercial property. You should confirm this yourself with regular inspections.
This is a great way to assess the general condition of the property while also looking out for any lease violations. Make sure to mark any potential things that might need maintenance during these inspections.
If you do notice lease violations, it's vital to have a system in place to handle them. It's generally good form to give a warning first, but after that begin charging them fees for the violations.
And make sure you include this fee system in your lease document so everyone can maintain lease compliance.
Screen Your Tenants
It doesn't matter how strict your lease enforcement is if you have bad commercial tenants. These individuals will damage your property, avoid rent, and require eviction in some cases.
That's why it's vital to screen any commercial tenants you're putting on the lease as a commercial landlord. If you don't have time to do this we recommend outsourcing tenant screening to another professional.
Need Help With Lease Enforcement? Contact PMI Amazing Spaces
We hope this guide helped you learn more about lease enforcement practices for your Charlotte commercial properties. Here at PMI Amazing Spaces, we know that as an investor lease enforcement is likely the last thing on your mind.
That's why we give you a commercial property manager to go through the process of creating an iron-tight lease for you and then enforcing it with your tenants.
This frees up your time to focus on things that matter like finding new deals. So if you're ready for the management help you need, contact us today.
