Handling Tenant Disputes in Commercial Property Management

Even the best tenant-landlord relationship can encounter a hiccup now and then. That’s why it’s important to have a strategy to identify, address and prevent conflicts and disputes. If emotions are high, the best thing you can do is get to the root of the issue so you can address your renters’ needs. 

The Importance of Clear Lease Agreements

The lease agreement lays the foundation for your relationship with your tenants and establishes clear expectations for commercial renters. It also outlines rights and responsibilities, so referring to it during a dispute can clarify legal obligations.

Depending on how it’s structured, a lease may provide direction for handling conflicts. Relying on verbal interactions increases the likelihood of miscommunications and misinterpretations. You’ll provide transparency and protect yourself from unfair treatment and unlawful actions.

Tips for Commercial Tenant Dispute Resolutions

Establish proactive communication: Complaints may occur for various reasons, such as maintenance issues, disputed fees, confusion over renewal and notice periods and neighboring tenants. Maintaining clear lines of communication allows you to address those topics efficiently, especially if you check in often. Make sure your renters know the best way to contact you and encourage them to provide feedback before minor struggles become bigger issues.

Acknowledge the issue: Empathy is essential when navigating conflict. Acknowledging the issue demonstrates that you value your tenant’s opinion and care about their concerns. Allow them to state their case, be an active listener and avoid interruptions to prevent miscommunication. An apology can go a long way toward soothing tension, even if you’re not at fault.

Create a conflict resolution process: Document interactions and note the date and topics discussed. That will help you track the progress you’ve made in resolving the issue. Collaborate on solutions that satisfy both sides and outline timelines to put them into action.

Learn from past experiences: Post-resolution interviews allow you to identify ways to improve how you address issues in the future. If you notice recurring issues, you may need to update your policies and lease clauses to enhance clarification.

Use technology to resolve disputes: Property management software is effective for logging and tracking communication, service requests and conflict resolutions. Digital document sharing keeps all parties informed on decisions and further action.

When to Involve Legal Counsel or a Mediator

If you’ve exhausted attempts to resolve tenant disputes or the issues are too complex, it may be time to consult a third-party mediator. A lawyer, arbitrator, mediator or court will help you and your tenant find an acceptable solution. Those individuals and entities can clarify lease terms and obligations, guide negotiations, protect interests and evaluate regulations. Frustration can lead to misunderstanding and inefficiencies, so working with a legal counselor allows you to avoid those obstacles.

Consider the following scenario:

A tenant signed a multi-year lease but wishes to terminate their agreement after 18 months because of decreased revenue. The contract briefly outlines an early termination clause, so you request the full remaining rent. Your tenant suggests that the vagueness of the terms doesn’t define early termination properly and refuses to pay the sum.

Considering the potential financial implications for both sides, a third-party mitigator could help you reach an amicable agreement. They review your lease terms for unclear language and misinterpretations and discuss potential resolution strategies, such as subleasing the space, a lump sum or a payment plan.

Creating a Positive Tenant Experience Through Dispute Resolution

Handling tenant disputes fairly and diplomatically can support tenant retention and reduce vacancy rates. You’ll also create a more cooperative environment amongst your renters. DRK and Company specializes in a variety of commercial real estate services, including brokerage and tenant representation. Contact our team to learn how we can help.

 

Until next time,

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