What Is An Operating Cost Dispute?
Starting a business can be a lengthy and sometimes stressful process. There are many costs and charges that you need to anticipate. Unexpected charges or an increase in charge often bring the most stress to a commercial tenant.
Fortunately, if these unexpected charges come in your rent, there is help. An operating cost dispute can be claimed if your landlord is charging you more than the simple ‘out-of-pocket’ costs of a building in your rent. These costs should be agreed upon, as they cover the necessities of what you should be getting from the building. They can include costs for keeping the property maintained, regular repairs and essential replacement of infrastructure if needed.
What Causes An Operating Cost Dispute?
This can begin in the early stages of the lease signing. If there is a discussion of an offer to lease, the rent costs should be established. As a tenant, if your rent is increased by a significant amount after a few months of operating, it could be grounds for an operating cost dispute.
Sometimes, landlords can use vague language in their lease or over-anticipate how much your business will be making. In either instance, they run up the cost of your rent, thinking that you will be able to afford it. Your rent should only cover the costs of property upkeep and match what you are getting from the property. If you are being charged more than what that upkeep is worth, you have the right as a tenant to apply for a claim.
Things To Keep In Mind
Starting a business isn’t easy. The last thing you need to be worrying about is a fluctuating rent cost that will put you in the red.
Always be sure that you know your lease inside and out before signing it. This ensures that you know what you are getting into and if there is anything that you need to clarify. This can also provide insight into the relationship that you can foster with your landlord.
This information will help you avoid any unexpected costs; upon signing the lease, and in the long run. Fortunately, there are many resources available to both tenants and landlords through the Landlord and Tenant Board. This Board has many services and details regarding the rights and responsibilities in a commercial relationship.
With any commercial issue or dispute, legal advice should be sought out to ensure that both parties have their best interests taken care of. That includes advice on discussions prior to signing the lease, moving forward with the property and what to do if a claim or dispute needs to be raised.
However, if the situation can not be resolved, firmer measures need to be taken. Hummingbird Lawyers’ Civil Litigation team can stand with you to ensure that you come to a cost-effective, and pragmatic resolution.