In the world of commercial real estate, those of us who are involved in the leasing or selling of commercial space refer to ourselves as “agents”. Does taking the role of an “agent” create a fiduciary relationship between us and those principals? In other words, when does a person owe another a fiduciary duty? While many have tried to define the circumstances or relationships that warrant the imposition of fiduciary duties, few have completely captured the countless applications of true fiduciary duty. So I decided to do a bit of research on the topic. I came across a reference to the fiduciary relationship as “one of the most elusive concepts in Anglo-American law,” and another as “a concept in search of a principle.” While entertaining commentary, it still leaves a gap in answering the question.
If you have considered leasing office space in Boise anytime during the last 20 years you probably have heard the term Class A. But is the building deserving of a Class A designation, or is that just a marketing claim? The listing of which actual buildings are considered Class A, B, and C is a local decision, and since most building owners and developers always refer to their buildings as Class A, regardless of the location, construction, or design, this term can be confusing.
Tenant Realty Advisors recently worked with a non-profit, Internet-based charter school that wanted to renew their lease under the best possible economic terms. They were willing to relocate only if there were compelling financial reasons. TRA met with the tenant to understand what worked and what didn’t work with their current location. Then we strategized with the client on how to best meet their goals for local office space. Their goals were straightforward: They wanted to reduce their current rent costs, but wanted to avoid the expense and inconvenience of moving. They also were hoping to refresh the existing space with new carpet and paint at their landlord’s expense.
Leasing an office space is a lot like entering into a business partnership. Ideally, the parameters are set up to benefit both parties, with each party offering something and expecting something in return. When the partnership is successful, everyone does well. And when it isn’t, well that’s a whole different topic.
Many lease agreements begin with a “Standard Form Office Space Lease,” a generalized, standardized agreement commonly available. Tenants need to know that while common, “standard” does not mean right or fair to the tenant. Leases are usually very long, complex and often printed in very small type, and, for the most part, everyone hates to read them. To make matters worse, landlords sometimes insert complicated legal language into standardized leases, tipping the scales even more.