When leasing out your commercial property to a business, you are taking on certain risks. These individuals may default on payments, damage your building, or cause other issues. If you want to get ahead of such problems and limit how much you may be liable for as well, here are the top guidelines to follow:
Yes, you can be held liable for various things when you rent out your building. If any kind of damage or accident occurs due to negligence, fire, electrical issues, or even the weather, you could be held responsible. As you can imagine, the cost for such issues would be incredibly high.
This is why you should always consult with a commercial insurance company and property leasing services before you rent out your property. They will be able to suggest various forms of coverage that can protect you in a wide variety of circumstances. Remember, it is best not to skimp on your coverage. What you spend now can end up saving you tens of thousands or even hundreds of thousands of dollars later on. Thus, it is always good to err on the side of caution.
It is important to create a screening process for each business that you will interview. You may want to sit down with a legal expert to ensure that all your bases are covered. The more extensive the screening process, the greater the chance of finding the right tenant.
You may want to start by running credit checks – this will show you if the company will be able to continue paying the rent for the duration of their lease. It is probably best to have a background check on the main owner to ensure that they are functioning above board. Finally, checking out their general reputation may be helpful as well.
Make sure that the company is up to date with all kinds of insurance. For instance, if the business is a hair salon, check that they have appropriate hair salon insurance and that it is up to date. This proves that in case of an issue, your renters will not be held liable or at the very least will have the means to pay off any trouble that comes their way. In turn, they can continue paying their rent without interruption.
When renting out your building to a business, you are responsible for maintenance. You should also keep an eye on how the building is being used and maintained. Now, it is quite possible that you will not have the time to handle such details.
Thus, it is best for you to hire a property manager for the job. They will be able to stay on top of the job and report back any problems to you. This will give you peace of mind and ensure that your tenants needs are taken care of.
These are the main guidelines to follow when leasing out your property to a business. These tactics will help to keep your investment safe and you free of liability.