Dodged a bullet recently.
A tenant with multiple locations ans great reviews made an offer on one of our spaces at the asking rent.
They communicated well and moved quickly to view the space - were excited to have them as a potential tenant.
When we sent over the lease, they very quickly accepted it as-is, and told us they were ready to sign.
Yellow flag.
We are dealmakers and it is important to me that our leases are fair and reflect market provisions. In fact, tenant attorneys very rarely mark up our leases heavily.
But you’d expect a tenant to at least have some questions, or take a few days to review the lease.
I become skeptical immediately.
So I asked my team to do more vetting - and all signs were a go.
A few days later the tenant signed the lease, but hadn’t sent in their first month’s rent and deposit.
Once you have a fully executed lease - getting out isn’t simple.
So, one of our guardrails is to never sign a lease until the tenant has paid us the deposit and first month’s rent. And of course, never give them a key until we have a fully executed lease and payment.
Some tenants need to be reminded, which isn’t a big deal. You just send them a “thanks for signing the lease, we’re just awaiting on payment via cashier’s check or wire”
Personal checks don’t work for us for that first payment, and serious tenants have absolutely no issue with this.
In this particular case, the tenant said they would wire the payment “tomorrow.”
Then it became “by the end of next week.”
Red flag. Major red flag.
If they’re going to mislead you on payment timing before they even have the keys, imagine what trouble lays ahead.
I told my team we weren’t signing the lease no matter what, and that this is not the sort of tenant relationship we want.
One of my main pillars: Better to stay vacant than sign the wrong lease.
If we had signed, we’d have a legal issue on our hands, and a space we can’t lease to anyone else until it’s resolved.
The wire never came.
English
