Many commercial lease agreements include rent abatement clauses. A rent abatement clause allows the tenant to pause rental payments during property repairs after a disaster, such as fire damage. Below are tips to avoid or minimize the abatement period.
Maintain the Property
Regular property maintenance ensures minimal damage in case of a disaster. For example, a poorly maintained roof will likely have a lot of debris that increases the extent of damage in case of a fire outbreak. On the other hand, a fire outbreak might spread little on a properly maintained roof free of debris.
Work with a contractor to create a maintenance plan. The building size, age, architecture, and materials determine the best maintenance plan. Follow the maintenance plan so that your tenants don't have to vacate the building for a long period in case of a disaster.
Intervene Immediately Upon a Disaster
Move fast to diagnose and fix the damage in case of a disaster. Say part of the roof starts to leak after a storm. Contact your contractor to diagnose the problem and fix it before it worsens. For example, a small leak might mean internal roof repairs, which means the affected roof section might collapse in the next storm. Prompt repairs will prevent costly and lengthy repairs.
Purchase Adequate and Relevant Insurance
Property repair often delays due to inadequate funds. Buy appropriate and adequate property insurance to avoid such delays. Note that many insurance policies have waiting periods, so you should buy coverage long before you suspect damage. That way, you can repair your building promptly, knowing that your insurance company will reimburse the costs.
Have a Contractor on Standby
Don't wait to hunt for a contractor after a disaster happens. Consult and vet contractors before you need them. That way, you have a qualified contractor to call for emergency repairs in case of a disaster. An excellent option is to use the same contractor for repairs and maintenance.
Consider a case where your building suffers flood damage, and you don't have the contacts of a contractor who can remediate it. You might have to endure prolonged rent abatement as you look for, vet, and hire repair contractors.
Commission Full Repairs
If something goes wrong with your property and your tenant has to cease operations for some time, use the opportunity to commission all repairs. Don't just focus on the most obvious and urgent issues. Say the roof is leaking, but the elevator is also broken, and the HVAC system also needs work. Take care of all the repairs, so you don't have to offer another abatement later.
Find out more about commercial abatement.
When you have something built, there are usually two things you want to be true of that item. You want it to be built correctly so that it serves its purpose. You also want it to be beautiful. That beauty can look like many different things, of course.
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