My tenants want network cable: Who pays?

QUESTION:

We are leasing office space to a tenant who wishes to run cable throughout the building for networking purposes. They are asking that we pay for the service, which amounts to an excess of $12,000. When the tenants move, they will take the server, but leave the cabling. Is this a normal thing for landlords to provide? Will we have obligations to the tenants with regard to down time or loss of work due to malfunctions in the system?

ANSWER:

While this cable idea was not yours from the get-go, you might want to pretend it was.There are likely economic incentives for embracing it warmly. When the current tenants move out, you will be able to charge a higher rent based on network-ready cabling.

That opined, however, you are right to be concerned about potential legal liability. Happily, you can probably ward off liability problems. Keep in mind that a commercial lease is mostly a matter of contract. Landlords and tenants are free to set their own rules. As long as there is clearly a meeting of the minds -- ideally, memorialized in writing such as in a lease -- you and the tenant can agree to whatever you want.

So in negotiating with the current tenants and in your leases with future tenants, you can both agree that they are free to make use of the existing cabling but that you make no warranties about its condition. Also, the tenants should agree that you are not responsible for maintaining the cabling and will not pay for any losses due to malfunctions.

Learn more about Finding and Renting Space for Your Business.

Reprint permissions