Evaluating A Potential Subtenant

POSTED ON 10-01-2016 FOR SHARED BUSINESS OFFICE BY NEAL LERNER

Usually when you meet someone you get an immediate feel for whether or not you're going to get along, but as we all know, first impressions are not always accurate. So, what do you do when you have a limited time to interface and vet a prospective subtenant - and you know that this person could become a permanent part of your work environment going forward? How do you know if it is going to be a good match?

Well, I think it is just fine to start with that initial impression - that gut feeling about another person. If the feeling is positive then it will be worth exploring further. So how do you explore in this situation?

First, you've got the internet and a very good opportunity to get a feeling for your prospect's business history and areas of concentration or specialization. This presents a good opportunity to determine if there is any business symbiosis that you can both take advantage of. The best starting point is the prospect's website for their business.

I suggest a sit down meeting in your conference room to discuss your expectations and any rules of the land that the subtenant is going to have to adhere to. You'll get a good feeling here whether or not the prospect is going to fit in and adhere to your anticipated behavior patterns.

You've got to make it clear that nothing the subtenant does can interfere with anybody else in the space. If you are delineating your relationship with an office space license, you'll have an easy opportunity for a mutual cancellation right, with notice. This is the safety switch for the whole office and if you choose a "bad egg", you'll be able to eject it from your suite without too much difficulty.

In the 5 years we've been renting offices for law firms and other professional firms, I've never once - not one time - seen a bad breakup occur. I've never heard a nasty story about a subtenant and the only complaints I've ever heard seem to be centered on neatness and piles of files. One time we did hear about a practice that turned out to have high traffic that wasn't appropriate for the reception area which looked like it had been converted to a waiting room at the train station. But, after 1 conversation, the schedule of visitors was shifted to the evening hours and the problem was resolved.

There's one final test I will suggest. Ask the prospect if you could call their present landlord. This is not always possible, especially in the case where the present landlord doesn't know that they are about to lose a tenant - which is why asking permission first is very important in this circumstance. The main thing you want to find out here is if the prior landlord had a good experience with the subtenant - - - - and peripherally if there were any payment issues you are sure to hear about this as part of the description of their experiences together.

You can't always be sure - but your intuition will always give you a good starting sense of what the other person is about and whether or not they will fit into your environment. Use the internet as a resource to evaluate someone and get a personal referral from the present landlord if at all possible. Last, have a cancellation option in the event things don't go as planned.

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