When you’re updating your employment policies, remember that a good employee handbook is an employer’s first line of defense. Keeping your handbook up-to-date ensures that your employees know your expectations and provides evidence of your policies and procedures in the event of a dispute.
To be fully protected, you must keep your handbook up to date, uniformly enforce your policies against all employees, and carefully document the reasons for decisions related to hiring, firing, employee performance, employee discipline, and termination. Also be sure to use measurable, meaningful criteria for promotions and to be thorough, professional, and respectful in handling employee-related issues including discrimination and harassment complaints.
Employment law consists of thousands of federal and state statutes, administrative regulations, and judicial decisions that govern the relationship between employers and employees. This area of the law is constantly changing, but an experienced employment law attorney can help you understand your obligations as an employer, explain the steps you need to take to comply with applicable laws, and defend your actions when problems arise with your employees.
Commercial leases often include something called a landlord’s lien. A landlord’s lien is a provision granting landlords a first lien in all of the personal property located on the premises. Do not agree to such a provision, because if your landlord has a lien on all of your assets, your bank cannot, thereby causing you trouble if you attempt to finance or refinance a project.
Reduce your personal liability by placing a limit on personal guarantees. Personal guarantees are required by most landlords, but the scope of those guarantees is often negotiable. You can reduce your personal exposure by limiting the guarantee to a set number of years or by decreasing the extent of the guarantee by a percentage each year.
Don’t let your landlord pass the buck to you with inappropriate common area maintenance (CAM) costs. Common area maintenance clauses require tenants to pay their proportionate share of the maintenance and operation costs but exactly what’s included varies from lease to lease. Certain fees make sense, but your landlord’s capital expenditures and tacked-on administrative fees may cause greater costs than you should bear. Try to get a cap to CAM costs, increases, and reasonable administrative fees that are tied to the services your landlord provides.
Only pay for the space you get by double checking landlord measurements of rental spaces. Commercial tenants often overpay for their spaces because of the inaccurate measuring of the premises. “Phantom space,” the extra space listed on lease agreements that does not actually exist, costs you extra money in base rent and CAM, and quickly adds up over a 10-year term. Before you sign, measure the space yourself and recalculate the rent based on the actual square footage delivered.
Continuous operations clauses require you to continuously operate your business during the days and hours set forth in the lease. If you were not to continuously operate your business during those times, the landlord could terminate the lease. A more even-handed lease should remove any continuous operation requirement or at least provide exceptions to continuous operation, permitting you to close for repair, remodel, refurbishment or in the event of a casualty.
Exclusivity and permitted use clauses are two sides of the same coin. Exclusivity clauses help your business by preventing your landlord from leasing spaces in the shopping center to competing businesses, but permitted use clauses may keep your business from expanding. When negotiating an exclusivity clause, you should aim for the broadest protection the landlord will allow. Conversely, if your landlord insists on a permitted use clause, make sure it does not cut off a valuable avenue of growth or expansion for your business.
A demolition clause allows a landlord to terminate your lease to redevelop or demolish a property and are often found in leases for older properties. This is problematic for tenants who invest in their rental property by making improvements only to have the landlord demolish it a few years down the line. If a landlord insists on a demolition clause and you want the location, limit your potential losses by insisting that the demolition right remain inactive for a certain period of time to ensure that demolition does not occur near the beginning of your lease term and make sure the landlord pays you for your business upon termination.
The answer to that depends on whether there is a relocation clause in your lease. A relocation clause permits a landlord to move your business to another location in the same building or shopping center to make room for another tenant. Even if the landlord covers the entire cost of relocation, a relocation still costs you a great deal in lost business during the move, returning customers unable or unwilling to find your new location and other costs of moving such as website, advertising and other costs associated with a changed address. If a landlord insists on a relocation provision, be sure to carefully delineate which rental spaces are acceptable (for example, make sure you get an endcap), clarify that the landlord will pay for all direct and incidental costs of the move and reserve the right to terminate your lease if the new space is unacceptable.