Minding Business

Tenants: Are You Paying for the Actual Space You Use?

Posted: August 21, 2017 by Anna Jotham

Any business watching the bottom line needs to know exactly where its money is spent. Since the business space you lease is often one of your larger expenses, it’s important to know precisely the space you’re paying for as those costs may not be in line with what you’re actually occupying.


Oftentimes, though not necessarily intentionally, lease agreements will include that the tenant agrees to the office size as stated. Both parties sign the agreement and get back to work. But does the stated size match the actual size?


When looking at a blue print, it’s easy to see the square footage you occupy, but it’s also standard for landlords to charge for common areas on a pro rata basis. When you add those together, that’s the square footage you should be paying for. Anything beyond that deserves explanation.


As a tenant, you have the right—and should exercise it—to have an independent third party measure the space in a way that both you and the lessor agree to. (The Building Owner and Managers Association offers a standard that may be agreeable to all parties.)


To maintain a positive relationship with the landowner, it’s best to approach the topic either when you initially consider the space or when it’s time to renew a lease—especially since that’s a logical time for a tenant to compare other options dollar-for-dollar.


Commercial property tenants can lose tens of thousands of dollars each year, sometimes even more, due to inaccurate space measurements. As a tenant, you are entitled to know what you’re paying for, and as a business person, you must.

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