You Can Never Know Too Much About Your Laundry’s Lease

Aside from the importance of their family, possibly the most valuable thing any laundry owner has is the lease document that protects and guarantees his or her right to occupy the premises in which they operate their laundry business. The longer period of time that is left on the lease term, the more valuable the lease becomes for them.

While most of us do recognize that signing a lease creates lots of obligations and some potential risks, we ought to look at the lease as an opportunity. We also should expend as much energy and time protecting and insuring that we honor those lease terms as we spend building up our laundry businesses.

That means being a good tenant, maybe the best tenant the property owner has. We can do that by always paying the rent on time and being the best business neighbor we can for our fellow tenants. If a laundry becomes dirty and it detracts from the area where others are trying to keep up their place of business. Those dissatisfied business neighbors complain to the landlord. He then raises a stink with you because you’ve made problems for him. If your method of doing business creates -worries and problems for the property owner, what answer would he give you when you ask to renew your lease?

Most laundry operators will tell you that property leases are one sided, and that the landlords side is the only side. Called unilateral or one sided, lease documents are designed to give a landlord all kinds of ways to get out of the lease, but usually only if rents are not paid. Landlords will forgive almost anything as long as they are paid their rent on time.

Remember that the lease for your laundry space was probably written by an attorney for the landlord who was being well paid and billing by the hour. No wonder leases are longer than needed they are paid for by the hour.

When you are negotiating for a new lease location, remember that you are the customer, and that there will always be other spots on which you can build. Yes, it’s a great place for a laundry, and you might have to wait a year or two for another as good, but you are better off waiting rather than signing a document with terms you will later regret.

When you and your attorney are reviewing a new lease, remember that there will be many clauses in the lease that are not really set in stone, but rather are negotiable. There will be one or more clauses that are irrelevant to laundry businesses. In negotiating, don’t be hesitant to ask that they be removed. There are others that should be voided or avoided altogether.

Most businesses in a shopping -center pay higher per square foot rents than do anchor tenants, such as major markets. You pay more because anchors supposedly attract customer -traffic to your laundry and to other tenants, but what happens to business when the anchor closes? There ought to be a clause in the lease that lowers rent if the main tenant leaves the center, or shuts down. There are some really lonely -centers when the main tenant leaves or closes their doors, even if they still pay rent. In such cases laundries can get badly hurt.

Try to have a clause included which will basically lower rents if the primary draw of the center goes out of business there.

Many shopping center leases contain a need to report on gross dollar volume, monthly or quarterly, because property owners under the lease are entitled to extra rents if their tenants are doing better. Laundries never reach the high dollar volumes called for and that clause should be struck from the lease.

Right to sell is very important to you and to the value of your business. There should be no unreasonable restriction to that right. If you must have the landlord’s approval, it must not be unreasonable or restrictive. No automatic rent increases on sale or excessive charges to rewrite the lease should ever be accepted.

When discussing the length of tenancy, you have to justify your investment and make it for as long a period as you can. One effective way to do that is to operate on option periods. The option is yours, not the landlord. If he wants a ten year lease, ask for as many option periods as he will allow. Thus as the original period ends, if you have options, you can decide whether or not to stay. If business is good, stay. If business is bad or only marginal, you’re free to leave. It’s your option.

Options to renew create value for the lease holder. Whatever multiplier is used to sell a laundry business, you will have the option period to improve potential income for the buyer. One laundry is for sale with nine years left on its original ten year lease. Another laundry makes the same net income, but has additional five year options to renew. Which one is more valuable?

What happens to your lease if there is a fire or riot destroying a substantial portion of the center, but not your place? There sometimes are clauses that allow a property owner to throw you out so he can rebuild the entire building. He will be starting fresh, over again. In that case the landlord goes on with his life, and all you’ll have is your insurance, hopefully, to build somewhere else.

The point of this meandering discussion on boiler plate and clauses in the lease documents you will be asked to sign is that there is a lot of it in any lease. They are not written to protect your interests. Unilateral means one sided and that side almost entirely favors the property owner. It is a variant of the golden rule: “He who has the gold makes the rules.”

During the first negotiations, actually you may have the upper hand because you are the “buyer” for the space the landlord agents are trying to lease. The faster they fill the premises space, the faster they can reach their goal of making money from their investment. That’s an idea which should never be lost on laundry owners. You are a customer for space the landlord or agents are trying to sell.

Don’t let fancy titles and really impressive offices awe you too much. They are business people just like you are. Their goal is to lease space for as much as they can. Your goal is to lease that same space for as little as you can. They have good attorneys; which means that you should get one too. Your lawyer doesn’t have to write it, just read all the boiler plate and tell you what each clause means.

Sure it will cost a little money, but all your attorney needs to do is keep you from signing a bad deal that could cost you thousands of future dollars. In other words, spend a few hundred now for advice, or risk much higher costs to get yourself out of some future problem.

In the laundry biz, we have enough worries without needing to be concerned about mistakes made over hastily signed lease documents. Take your time to be sure that what you are signing is right for you, your family, your future and that of your business.

Date:-05/28/2011
By:-Admin


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	You Can Never Know Too Much About Your Laundry’s Lease Aside from the importance of their family, possibly the most valuable thing any laundry owner has is the lease document that protects and guarantees his or her right to occupy the premises in which they operate their laundry business. The longer period of time that is left on the lease term, the more valuable the lease becomes for them. While most of us do recognize that signing a lease creates lots of obligations and some potential risks, we ought to look at the lease as an opportunity. We also should expend as much energy and time protecting and insuring that we honor those lease terms as we spend building up our laundry businesses. That means being a good tenant, maybe the best tenant the property owner has. We can do that by always paying the rent on time and being the best business neighbor we can for our fellow tenants. If a laundry becomes dirty and it detracts from the area where others are trying to keep up their place of business. Those dissatisfied business neighbors complain to the landlord. He then raises a stink with you because you’ve made problems for him. If your method of doing business creates -worries and problems for the property owner, what answer would he give you when you ask to renew your lease? Most laundry operators will tell you that property leases are one sided, and that the landlords side is the only side. Called unilateral or one sided, lease documents are designed to give a landlord all kinds of ways to get out of the lease, but usually only if rents are not paid. Landlords will forgive almost anything as long as they are paid their rent on time. Remember that the lease for your laundry space was probably written by an attorney for the landlord who was being well paid and billing by the hour. No wonder leases are longer than needed they are paid for by the hour. When you are negotiating for a new lease location, remember that you are the customer, and that there will always be other spots on which you can build. Yes, it’s a great place for a laundry, and you might have to wait a year or two for another as good, but you are better off waiting rather than signing a document with terms you will later regret. When you and your attorney are reviewing a new lease, remember that there will be many clauses in the lease that are not really set in stone, but rather are negotiable. There will be one or more clauses that are irrelevant to laundry businesses. In negotiating, don’t be hesitant to ask that they be removed. There are others that should be voided or avoided altogether. Most businesses in a shopping -center pay higher per square foot rents than do anchor tenants, such as major markets. You pay more because anchors supposedly attract customer -traffic to your laundry and to other tenants, but what happens to business when the anchor closes? There ought to be a clause in the lease that lowers rent if the main tenant leaves the center, or shuts down. There are some really lonely -centers when the main tenant leaves or closes their doors, even if they still pay rent. In such cases laundries can get badly hurt. Try to have a clause included which will basically lower rents if the primary draw of the center goes out of business there. Many shopping center leases contain a need to report on gross dollar volume, monthly or quarterly, because property owners under the lease are entitled to extra rents if their tenants are doing better. Laundries never reach the high dollar volumes called for and that clause should be struck from the lease. Right to sell is very important to you and to the value of your business. There should be no unreasonable restriction to that right. If you must have the landlord’s approval, it must not be unreasonable or restrictive. No automatic rent increases on sale or excessive charges to rewrite the lease should ever be accepted. When discussing the length of tenancy, you have to justify your investment and make it for as long a period as you can. One effective way to do that is to operate on option periods. The option is yours, not the landlord. If he wants a ten year lease, ask for as many option periods as he will allow. Thus as the original period ends, if you have options, you can decide whether or not to stay. If business is good, stay. If business is bad or only marginal, you’re free to leave. It’s your option. Options to renew create value for the lease holder. Whatever multiplier is used to sell a laundry business, you will have the option period to improve potential income for the buyer. One laundry is for sale with nine years left on its original ten year lease. Another laundry makes the same net income, but has additional five year options to renew. Which one is more valuable? What happens to your lease if there is a fire or riot destroying a substantial portion of the center, but not your place? There sometimes are clauses that allow a property owner to throw you out so he can rebuild the entire building. He will be starting fresh, over again. In that case the landlord goes on with his life, and all you’ll have is your insurance, hopefully, to build somewhere else. The point of this meandering discussion on boiler plate and clauses in the lease documents you will be asked to sign is that there is a lot of it in any lease. They are not written to protect your interests. Unilateral means one sided and that side almost entirely favors the property owner. It is a variant of the golden rule: “He who has the gold makes the rules.” During the first negotiations, actually you may have the upper hand because you are the “buyer” for the space the landlord agents are trying to lease. The faster they fill the premises space, the faster they can reach their goal of making money from their investment. That’s an idea which should never be lost on laundry owners. You are a customer for space the landlord or agents are trying to sell. Don’t let fancy titles and really impressive offices awe you too much. They are business people just like you are. Their goal is to lease space for as much as they can. Your goal is to lease that same space for as little as you can. They have good attorneys; which means that you should get one too. Your lawyer doesn’t have to write it, just read all the boiler plate and tell you what each clause means. Sure it will cost a little money, but all your attorney needs to do is keep you from signing a bad deal that could cost you thousands of future dollars. In other words, spend a few hundred now for advice, or risk much higher costs to get yourself out of some future problem. In the laundry biz, we have enough worries without needing to be concerned about mistakes made over hastily signed lease documents. Take your time to be sure that what you are signing is right for you, your family, your future and that of your business. Date:-05/28/2011 By:-Admin