3 Tips for Avoiding a Bad Landlord

by Angie Mohr on September 17, 2012

Whether you’re trying to get your business off the ground or looking to expand, you have hundreds of details to attend to. Thinking about what kind of landlord you’ll have for your new store or office space probably isn’t at the top of that list. However, lots of bad (and sometimes really terrible) landlords exist, and ending up with one can harm both your business and your sanity.

Here are three tips for assessing a potential situation before you sign a commercial lease — and avoiding a bad landlord.

1. Ask questions. The first time a landlord shows you a potential new office, you will probably focus on looking at the space itself, perhaps envisioning where your desk will go. The landlord, however, will be using this time to assess whether you would make a suitable tenant. You can also find out several things about the landlord during the showing: Arrive with a list of questions, such as how many other properties the landlord owns and what the maintenance and repair policy is. Ask the landlord for a list of references from current or former tenants — and contact them. You should also do a little sleuthing on your own.

2. Get promises in writing. During your site visit, the landlord may make lots of promises about work that will be done, such as adding a coat of new paint, repairing broken fixtures, and replacing carpet or other flooring. Keep in mind that landlord can promise you anything, but there’s no guarantee that the work will ever get done — unless you get those promises in writing. A landlord who won’t commit to fixing current defects on paper is also unlikely to address future problems in a timely manner, if at all.

3. Look into the landlord’s finances. Most landlords will want to check your credit to make sure that you will be able to pay the rent. But the landlord’s financial situation could have a huge impact on your business. If the landlord is behind on the mortgage or owes back taxes, the property could be in danger of foreclosure; this may result in your company being kicked to the curb unceremoniously. Although you won’t be able to run a credit check on the landlord, you can find out (in most jurisdictions) whether the property shows up on the tax sale or pending foreclosure rolls through your municipal office. If the building appears to be in danger of being sold, look for a more stable situation.