The year 2017, just like every year before it, has the potential to be a fantastic year, regardless of what industry you are in. If you are involved with commercial real estate, be that as an owner, investor, or lessee, there are five key things that you must do to make sure that real estate continues to work in your favor. Let’s review these five items.
1. Check Your Lease Agreement
Whether you own a property and lease it out, or whether you are the lessee yourself, you must review the lease agreement. Check that it is properly signed, that you have a copy in a safe place, and what the key dates on the agreement are. Make sure you know when the next rent increase is due and when your lease expires. If the latter is in 2017 or 2018, make sure you start thinking about a relocation strategy.
Relocating a company can also be time-consuming and disruptive, with risks to employee and customer relationships. A relocation plan must include mechanisms for evaluating the risks and benefits of the move, as well as a detailed checklist of relocation tasks.
2. Audit the Expenses of Your Operations
For property owners, this means checking the assessed value of the property in comparison with its market value, and reviewing their property taxes. If you find that your assessed value is above market value, you may be able to get a reduction in property taxes.
Other important expenses include insurance coverage and utilities. If you are the lessee, then you must ask your property manager for an overview of expenses. Also find out whether there are anticipated increases.
3. Check Your Insurance Coverage
There are several things to do and check. First, you need your OSHA 300 A Notice and post this until April 30.
The OSHA Job Safety and Health: It’s the Law poster, available for free from OSHA, informs workers of their rights under the Occupational Safety and Health Act. All covered employers are required to display the poster in their workplace. Employers do not need to replace previous versions of the poster. Employers must display the poster in a conspicuous place where workers can see it.
If you own the property, ask all your tenants for their certificate of insurance. If you lease the property, provide this certificate to your landlord. The insurance company should be A rated and admitted.
Make sure you check your contents insurance and whether this covers the essential elements of your business. Do also look into business interruption benefits, particularly if you are the landlord. You also need liability and worker’s compensation insurance, and you should also ensure that your omissions, errors, and liability policies are up to date.
4. Check Your Maintenance Contracts
Whether you own or occupy a location, you have to make sure that a proper maintenance contract is in place. Usually, lessees have to pay for contracts for plumbing, HVAC, and roof. Additionally, lessees are usually responsible for at least 50% of replacements, repairs, and maintenance.
5. Check Your Fire Sprinkler Certification
Last but not least, there is the issue that too many tenants and property owners alike forget about, which is their fire sprinkler certification, which should be checked by a certified fire inspector.
The NFPA Certified Fire Inspector I (CFI-I) certification program was created in response to repeated requests by local entities, state agencies, and national organizations for certification programs founded on the NFPA 1031, Standard for Professional Qualifications for Fire Inspector and Plan Examiner, and other applicable NFPA codes and standards.
Sprinklers should receive a five year certification, which will be indicated through a sticker or set of stickers. Check to make sure that these are still all in date.