Years ago, there was a small,
remote island that was relatively non-descript and unnoteworthy. Then two multi-billion dollar pharmaceutical
companies decided their business’s future hinged on acquiring it.
Why? Its climate and soil composition was ideal to
grow a certain tree that had revolutionary medicinal value. The pharmaceutical companies needed to
harvest and grow and lot of these trees and this was the only place where they
could find the perfect conditions to do so.
So what happened? These heavyweight industry titans went after
each other to procure this island resulting in a bidding war (hundreds of
millions for dollars over a nominal asking price), lawsuits, threats, and tons
of bad blood. After millions had been
spent and not one tree had been harvested after a year, a level-headed senior
executive suggested the use of a mediator.
People had their doubts because the companies were so tight-lipped about
trade secrets; they wouldn’t divulge anything about their intended use of the
trees.
As the story goes, the mediator
ironed out a deal within an hour. All
lawsuits were dropped, conversations turned from sharply bitter to excitedly
collaborative, and the rivals eagerly bought the island together in joint
ownership. They were both in production
within 6 months.
What happened? Both pharmaceutical companies still needed
the trees, but the first only needed the leaves the other only needed the bark. Once this was discovered, both pharmaceutical
companies were in business! Adversaries
became profitable allies.
It was a pretty simple solution,
right?
Communication is important,
especially in the property
management business. And,
conversely, non-communication can be very expensive and time consuming!
A rental relationship can thrive
with good communication and turn seemingly lose-lose arrangements like a tenant
needing to get out of his lease into win-win situations. Here are a few examples:
A tenant wanted to get out of his
lease early due to a job loss during the spring and the owner wanted to
sell. This turned out well as the tenant
paid an extra month of rent to terminate their lease and the owner had a vacant
month paid for while the home was being fixed-up during an active spring/summer
sales market.
Or a tenant was a landscaper and
needed an extra month to vacate. The
owner wanted to sell immediately, but allowed for an extra month of
renting. For this negotiation, the
tenant landscaped the yard for free before vacating. This gave the tenant the time they needed,
while saving the owner money for fixing up the yard.
These types of win-win
negotiations are only possible when landlords and tenants talk and find out the
best path forward together. A good
property manager makes sure that these issues are fleshed out and potential
solutions are vetted thoroughly.
Anyone can take a hard line on a
lease and impose their will legally. But
this is rarely the best and most profitable path.
As a postscript to the initial story,
the big loser was the owner of the island.
Through incomplete information, the island owner almost achieved a huge,
unnecessary payday. In the property
management sphere, the island owner is usually the lawyers who are paid to
enforce the lease.
So talk to your tenant! Good things can happen and can turn seemingly
lose-lose scenarios into win-win.
Happy landlording!
Brett Furniss is the head property manager of BDF Realty
(Charlotte
Residential Property Management), the trusted real estate advisor for Charlotte
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