Howard Kline’s CRE Radio on the new CalBRE Duel Agency Law

      Howard Kline,Esq does and internet radio show called CRE Radio. He recently did a piece on the new law. Initially he noted that the law only applied to commercial sales. I provided him with the correct information and he issued a correction.

     Howard makes the ramifications quite clear. Enjoy and feel free to sign up for CRE Radio.


Don’t Miss the Walkthrough-It can cost you!!!

If you are a commercial tenant renting space you will likely meet with your landlord for at least two walk-throughs of your suite…one before you take possession and one right before or right after you vacate. Both are extremely important and should not be missed. 

We strongly recommend you bring your “Team” with you both for support and professional insight. This may include whomever is the “lease administrator” for your firm. In many cases it may be your managing partner, president/CEO, firm administrator, CFO or in the case of our clients, a representative from IN/House corporate Real Estate.

Let’s start with the pre-occupancy walk-through. You will typically be notified by the landlord that your suite has been “substantially” completed and they suggest a date to meet them at the suite. Expect them to bring their contractor, building manager, architect and possibly other tradesmen. The objective is to make sure any improvements…large or small…have been completed to your satisfaction. The landlord’s rep will usually put together a “Punch List” of the items that need to be completed which may include anything from installation of appliances to dings on the wall. 

Start by going office by office…room by room. If you see something that was an existing condition but was not something you asked to be installed, take a photo. It could be some wiring that was already there or even something as little as a hook on the back of a door. Our suggestion is TAKE A PHOTO…don’t you love those smartphones and IPads?

Why so important? Once you move in and have accepted the premises and items are not on the punch list and you later find out there are defects, landlords LOVE to send someone out to your suite to make the repair AND send you a nice invoice.

On the other end of the term the walk-through will usually consist of the landlord’s property manager. You are no longer their “customer” so that friendly smile may turn into a glare of disdain because you are vacating their building…oops…there goes the rent 😦 . 

The lease usually has a clause that you are expected to leave the premises in the same condition you received it other than anticipated “normal wear and tear.” What does that mean? Do you really want to landlord to make that unilateral determination? Again, our suggestion is to bring a professional. We always try and meet our clients for the final walk-through.  In fact, we most often call the property manager about a month before the termination date to ask what they want my client to remove and what they want to stay.

We had a situation recently where the landlord wanted my client to remove all the cabling from the suite. Not unusual except we argued most all the cabling was installed when we took over the suite…therefore it was part of the building. We only removed what we put in. On the opposite side, we had a deal years ago when Cat-5 cabling was new technology. We got it in the lease that the landlord would leave the cabling for our use (and as part of the building). When we did our pre-commencement walk-through the electrician who through he was doing the landlord a favor, removed all the cabling and laid it in a circle in the middle of the floor. It cost the landlord about $5K to reinstall our cabling PLUS we didn’t have to remove it at the end.

Today we did a walk-through following vacancy. Client did a great job cleaning the suite. The property manager met us there with a growl on her face determined to find fault where there appeared none. But she managed to find something. Apparently there was a coat hook on the back of one of the doors.  She insisted it was put in by my client and it would cost and arm and a leg…at a minimum…to repair the fine mahogany door. While we hadn’t taken pictures upon commencement since who would have thought a coat hook wasn’t normal…the occupant of that office-a lawyer I might add-remembers clearly how excited he was to have a hook to hang up is suit jacket for the days he went to court. The others in the suite were jealous. LOL!!! We don’t anticipate being charged….or at least we’re prepared to take it to the next level should the property manage pursue.

One more helpful tip…before the final walk-through, take all the picture nails off the wall and bring a can of Spackle. While the painter will need to prep the walls anyway, it does show a higher level of care and concern on your part to clean up the suite.