If you have extra space in your office building, it's a smart move to rent out this space. However, it's very important that you choose the tenants very carefully, as you don't want to experience the hassles of having to worry about missed payments from your tenants, and even the possibility of having to evict them. That's where proper screening comes in. Here are some tips to remember in order to properly screen commercial building tenants:
Know what information to get from your prospective tenants. First of all, you should be armed with a checklist of information you'd need to get from the applicants. These info include the following: their social security number, current address, the property owner or manager of their current address and phone number.
You should also consider the type of company that it is. An important factor to your decision-making is to check whether that company engages in reputable business, or if it undertakes some shady negotiations. You may not want your office building be associated with a disreputable company.
Perform a credit report check, and background check. It's important that you get their permission, in writing, for you to run a credit report check on their company, as well as a background check. You could use any of the three national credit bureaus - Experian, Equifax and Transunion - to get a report on their credit history.
You should also call the owner of their current office space to find out about their background on payment - that is, whether they regularly pay their rental fees or not. If you find that the company has a history of being evicted, you might want to cross them off your list.
Use online public records check. You might want to try checking the company name at online public records check, such as one available at publicrecords.searchsystems.net. This is a free online service which could help you see if their business is indeed registered or fictitious, if they have criminal warrants, etc.
Check if they are a legitimate company. You should call your state government main office to check whether the company is a valid and registered company. You should also inquire about that company's records, specifically whether they have pending issues or even criminal cases.
Check their ability to pay the lease over the period of your contract. You may want to verify the business' financial records to see if they are capable of paying their lease in the amount of time stated in your contract. For further security, you should have an agreement about how their rental fees will be paid in case of their business' bankruptcy; for example, through the business owner's personal bank account. Consult with your lawyer about how to create a contract with these clauses.
Stick to a short-term contract. It may be the best move to stick to a short-term contract; think of this as a trial period to see whether your prospective tenant is a reliable tenant.
There you have it! These are just some of the ways to screen commercial building tenants. Good luck, and hope this helped you out!