1. Due Diligence – the tenant forgets to check if the leased property is zoned for the intended business use. So the result is that the tenant cannot work in the location they are stuck with by way of the lease.

2. Improvements – the tenant takes the terms of a lease as they are offered without negotiating for either the property being updated to their needs or rent-free months to update themselves. Remember this is a tenants’ market, not a landlords’ so use this to your advantage.

3. Sublease / Assignment – the tenant agrees to a lease without this right. Who knows if your business will be successful. In fact, 9 out of 10 fail. A proper exit strategy is appropriate for risk management.

4. Options – the tenant agrees to a lease for a set term without additional terms or ability to purchase the property. If you are the 1 out of 10 that succeeds, your success will be jeopardized if you are kicked out after your initial term. A proper expansion strategy is appropriate for growth management.

5. Timing - probably the biggest problem faced overall. Tenants think that negotiating and agreeing to a lease is a rush job. If you are intending to open for a specific season allow ample time. If the landlord knows your back is against the wall, they will prey on you.

6. Term - when it is commercial, you need more than a year. You should get at least 3 years because that is the average time for a new company to turn a profit.

7. Restrictions - if the property is one of many spaces, you should ensure that a competitor cannot open next door. This applies mostly in shopping centers.

8. Guarantee - the purpose of a corporation is to minimize your personal exposure to liability. If you do not need to guarantee the lease, do not offer a guarantee. If you do need to guarantee the lease, you may want to think of putting your assets in your spouse's name.

9. Due Diligence - some leases require the tenant to pay all utilities. Get the prior bills and add the average to the cost of your monthly rent before you determine affordability of the leased premises.

10. Self-Help – lots of tenants negotiate and sign a lease without professional help by a licensed attorney. A real estate agent’s help is simply not enough and may even constitute the unauthorized practice of law. The key is to spend a little bit of money now in order to avoid ambiguities and therefore avoid spending a lot of money later when litigation arises.

GENERAL RULE: Sellers should pay $500 every time.

Tonight at The Real Estate School I was asked why only Long Islanders pay (as a general practice) and don't fill out the Property Conditions Disclosure Statement (PCDS)?

For starters, I believe that everyone in New York State (NYS) has this practice, not just Long Islanders. If someone knows otherwise, please elaborate. Also, this law is State specific, NY's is called NY REAL PROPERTY LAW ART. 14 sec. 462(2), so other States don't use this law as it is enacted in NYS.

For those who don't know what I am talking about, the PCD Act, which was enacted in NY on March 1, 2002 is a law that requires sellers of residential real estate to complete and deliver a 48 question disclosure statement to buyers as part of the transaction. Yet, failure to deliver the PCDS before the buyer signs the contract, requires the seller to give a $500 credit against the purchase price to the seller at the time of closing. As a result, a seller can avoid answering any questions, which may potentially expose the seller to liability, by only paying $500.

A copy of a PCDS form can be found by clicking here

So - Caveat Emptor lives on!

Thank you for all who attended "Mold is Money", you were a great class!!!

1. Inspect the property with pictures signed / initialed by landlord before take occupancy to verify condition of property for security deposit purposes.
2. Right to assign / sublet - if conditioned on prior approval, said approval should not be unreasonably withheld.
3. Option for additional term.
4. Right to subtract self-help repairs from rent.
5. Landlords right of entry is restricted to business hours with reasonable notice except in emergency circumstances.
6. Landlord is responsible for all maintenance (outside and inside).
7. Unrestricted right of access to all common arrears (such as laundry machine).
8. No more than 1 month security deposit with security deposit being returned upon termination of lease and delivery of keys.
9. Liquidated damages provision (set damages) for landlords failure to repair in a timely maner.
10. Have an attorney review the lease so you don't get pushed around.

Please see my friend Chad Hooper's blog at http://chadhooper.tv/

It has a great display of selling prices in the Hamptons with interesting visuals, plus Chad is a great local agent who deserves your support.