Delaware Business Lawyer Blog

When you receive the form lease from your landlord, you can expect to see a paragraph that requires you to pay your pro rated share of increases in taxes and insurance, charges for gas, electricity, etc., and your pro rata share of trash removal. You should have the right to review the landlord’s books and records to assure yourself that you’re not being overcharged by the landlord.

Although the lease might say that your landlord’s annual determination of expenses is binding, it should go on to give you, as the tenant, the right to review the landlord’s books and records supporting such determination.

I’ve seen leases that say you have the right to use an independent accountant to perform the review, but the accountant can't be compensated on a contingency basis. In addition, you may be given only 90 days within which to object. The problem with accepting a 90 day limitation is that it’s virtually impossible for most tenants to determine whether there's anything wrong within 90 days. You have to hire a lease audit firm to review the lease and the bills, you have to gather internal information, coordinate schedules for the audit, conduct an on-site review of the books and records, complete the analysis, prepare a report, and present the findings to the landlord. The result of this is that the necessary work just can't be done within 90 days, and so you can't meet the deadline. There should be an Addendum to the form lease giving you more than 90 days to get this done.

As far as who can help you with the audit, you should be able to use a contingency firm if you feel it would be in your interest. The landlord has no legitimate interest in telling you who you can hire. Certainly, the landlord wouldn't tell you what attorney to use and what your fee arrangement should be. The reason a contingency fee audit firm could be good for you is that you may not have the money needed to pay for an audit on an hourly basis. This means that even though you have the right to an audit, you generally will not exercise your right unless you can use a contingency fee firm.

By the way, a contingency firm is one that gets paid based on how much money they save you. If the audit finds you have not been overcharged by the landlord, there is no fee.

It's been my experience that many business owners don't take the time to carefully read the commercial lease that comes from the landlord. That's understandable if you've ever seen the length of that document, or how small the print is, or if you actually tried to get through all the legalese.

The form lease you get from your landlord probably contains some language which you would not agree to if you understood it, and I can tell you that it's common for landlords to agree to some changes if they're reasonable. Let me give you a few examples.

The lease may require you to comply with all governmental laws and regulations applicable to the use of the premises and to comply with all governmental orders for the correction, prevention and abatement of any violations in the building. That sounds okay when you read it. However, even though you don't plan on conducting illegal activities, a “compliance with all legal requirements” clause can impose broader obligations and expense than you might realize. For example, it could require you to abate environmental problems even if they existed before the commencement of the lease. You could also be obligated to comply, at your expense, with the requirements of the Americans With Disabilities Act, zoning requirements and other matters. There should be an Addendum to the lease which makes an exception for these types of things.

Almost all leases have a clause stating that the lease represents the entire agreement between the landlord and the tenant. The important thing to keep in mind is that you can’t rely on any oral comments, promises, or understandings unless they are specifically in the Lease Agreement or an Addendum. Therefore, if you were told anything important that’s not in writing, make sure it’s put in an Addendum to the lease.

You’ll probably see a paragraph that mandates that the premises are to be used solely for the purposes set forth. Although it’s common for a lease to provide how you as the tenant can use the premises, it makes sense for you to try to use a broad enough use that will allow flexibility for your evolving business or for purposes of subletting or assignment.

Your lease may give you the non-exclusive use of the common areas, including parking facilities. That section may go on to say that you cannot park more vehicles in the parking facilities than your proportionate share of the total parking spaces available for common use. It states than you are not guaranteed any specific number of parking spaces. Although these provisions are reasonable, this could become a problem if other tenants are not subject to the same restrictions as you are. For example, if the landlord were to rent space to a large company that has a lot of employees, they could take up more parking spaces than would be allowed under their proportionate share. You can deal with this in an Addendum by stating that the landlord agrees that all other tenants will be subject to the same restrictions regarding parking spaces as you are. Otherwise, it may be difficult for you, your employees and your customers to find a parking space.

Your lease might give the landlord the right to require you to move from the premises to other space of comparable size. If you can't get the landlord to delete this, you should at least negotiate for several things. If the lease doesn't say where you can be relocated to, this should be spelled out. You would not want to be relocated to another part of the state. There should be a time limit within which you should be up and running in the new location. The landlord should also pay for new business cards, letterhead, etc. The Addendum should provide that the landlord’s right to relocate you can only be exercised one time during the entire term of the lease and any extensions.

These examples obviously don't apply to every business location, or to every situation. Hopefully, they will allow you to see that language in a form lease may seem okay, but if you consult with an experienced lawyer, you may discover that some changes are in order.

In my next article, entitled "Auditing Your Landlord's Books," I'll give you another example that discusses the costs your landlord bills you for and your right to have the figures reviewed by someone looking out for your best interest.

I've previously shared with you in a series of articles my thoughts about how to find and keep good employees. If you follow these rules, your good employees are more likely to stay with you for a long, long time.

Show your appreciation, every day. It only takes a second. Use the words “please” and “thank you.” If your employee did a good job in preparing a document for your review, write the words “nice job” or “great work” at the top before you return it.

Don’t yell at an employee or throw things. Don’t criticize an employee in front of others.

Give your employees the authority to handle day-to-day problems when they come up, and let them know it's okay if they don't handle the problem the way you would have.

Treat your employees as if they are your most important customers.

Ask your support staff for suggestions on ways of improving things, and take their suggestions.

Make work enjoyable for your employees.

Establishing a new culture is hard work, and it doesn’t happen overnight. But if you're willing to work at it, you'll find that your employees will do a better job, your employee retention problem will disappear, and the ultimate result of your new culture will be a more successful company.

In one of my previous articles entitled "Interviewing Potential Employees," I talked about the importance of evaluating a job candidate's interpersonal traits. Here's a list of some of the traits to consider.

ability to handle stress

ability to motivate themselves

self discipline

planning skills & organizational skills

ability to make decisions

willingness to take risks

common sense

business sense

innovation & creativity

outgoing and friendly

ability to learn quickly

courteous

meticulous

dependable

loyal

ethical, trustworthy

professional

adaptable to change

thirst for knowledge and skills development

In many businesses, employees think they’re not trained enough, they’re not empowered enough, and they don’t know enough. Information is power. If you want your employees to make good decisions, they have to be well informed. Share with your employees such things as long term business strategy and year-to-date financial results on a regular basis. Encourage your employees to share their observations, concerns and ideas, and provide a convenient forum for communication. You do this with open communication, meetings, education, and brainstorming.

Empowering your employees enables your employees to use their talents. It means giving them the knowledge they need to make decisions, and giving them the authority to act on those decisions. Empowering your employees through knowledge and learning enables them to grow, and it will add value to the service your company gives to your customers.

Is it scary to change your way of doing things? Are you wary of sharing information with your staff? You bet. But the benefits of empowering your employees far outweigh the risks. You've already given your employees the tangible tools they need in the form of desks, computers, telephones, etc. Recognize that your employees have a lot to offer, and you will have a culture based on what is of value to your employees. Give your employees the knowledge and the authority they need to do their jobs well, and they will take pride in their work and want to be a part of your cpmpany's culture for many years.

In conclusion, once you hire someone, take the time to train them. Rather than just teaching your employee how to do something, explain why they should do it and how what they’re doing fits into the big picture. Be very patient and kind. If you judged them correctly during the interview, they really want to do a good job. If at first they don't do something right, assume that the fault lies with your failure to fully explain what you wanted.

Once you find and hire the right individual, how do you keep them from quitting? Keep in mind that some employees quit and leave, while others quit and stay. If you have the right culture, the likelihood is that your employees will do neither. The most successful business owner I have had the privilege of representing for more than 20 years uses the phrase “outside-in.” It describes a culture that's customer driven, where you find out what your customers want and you give it to them. This is to be contrasted with an “ inside-out” mentality where you decide what your customers want. My favorite example of an outside-in approach is when Mazda Motor Corporation was designing the Miata. Instead of allowing their engineers to design and build a car that their marketing department would then have to convince the public to buy, they went out and researched what their customers wanted. They even went so far as to have potential buyers listen to audio tapes of different car engines and choose which sound they liked the best. The researchers then took the most popular sound to their engineers and instructed them to make the Miata engine sound like that.

You want a culture that's open and that fully shares information with your employees. Sharing information produces more knowledge, and an employee who has more knowledge has more confidence. When an employee has more confidence, they usually make better decisions, are more innovative, more productive, and happier, and most importantly, they don’t quit.

A cultural driven organization is far more successful than one driven by tangible things and by structure. When you have the right philosophy, you create a culture and a structure based on what’s important to your employees. We all understand that salary is important. But I’ve discovered over the years that time off is of greater importance to my employees than money. Because of this, each of my employees receives generous vacation time, i.e, 3 to 5 weeks depending on their tenure. After an employee has been with my office for 5 years, and on each subsequent 5-year anniversary, they receive an entire month off with pay. And that’s in addition to their regular vacation time. The same thing applies to how you set up the physical layout of your office. In my office, each of my employees (except for my receptionist) has their own office with windows. Would having their own offices be of value to your employees? If you remember the final scene in the movie “Working Girl,” Melanie Griffith’s character knew she had finally made it when she got her own office. It’s up to you to create a structure that allows for what’s important to your employees.

In many companies, the employees have the perception that the owners and managers put themselves on a pedestal over their employees and create a class environment. If you adopt a culture where every employee is considered equally important, if you create a culture where the receptionist is just as important, albeit differently important, as the CEO of your company, then your employees will see value in what they do. And if your employees see value in what they do and are treated accordingly, then you’re going to retain them.

The next article in this series is entitled "Training Employees Empowers Them."

In my last article dealing with Interviewing Potential Employees, I talked about asking the candidate for the job open-ended questions. Here are examples of these types of questions.

How much supervision did you have in your previous job?

What's the biggest disappointment in your work history?

Why are you leaving your present job?

What things do you look for in an organization?

What would you say is the most important thing you're looking for in a job?

What are your strengths?

What would you say are areas needing improvement?

What are some things you would like to avoid in a job? Why?

In your previous job what kind of pressures did you encounter?

What were some of the things about your last job that you found most difficult to do?

What are some of the problems you encounter in doing your job? Which one frustrates you the most? What do you usually do about it?

What kind of job do you see yourself holding five years from now?

What things give you the greatest satisfaction at work?

What are some aspects of your present position that you like?

What are some aspects of your present position that you dislike?

What traits or qualities do you have that you feel could be strengthened?

Describe a conflict or disagreement at work in which you were involved. How was it resolved?

AND, my favorite open-ended question: If I were to ask your current boss to tell me one thing you do that drives him crazy, what would he tell me?

Once the interviewing process is over, hopefully you've found and hired an employee with great potential. In my next article on this subject, I'll share with you my thoughts on How To Keep Your Employees From Quitting.

Having represented businesses throughout Delaware for many years, I've seen that many companies follow the same procedures when it comes to interviewing prospective employees. When looking for a new employee, your primary focus should not be on the candidate's skills or experience. Instead, focus on their personality, professionalism, character, appearance, intelligence and common sense. If a candidate has these traits, they can learn to do the work. On the other hand, if the candidiate has experience and skills, they’re not going to last very long if they’re inconsiderate of their co-workers, unprofessional, irresponsible, lack common sense, or are not trustworthy. Most people who conduct an interview don’t look for the right things. They ask the candidate questions such as “where are you working now,” “what do you do in your current job,” and “what kind of experience do you have.” If you ask these questions first, you’re starting at the wrong end. Nor can you discover what a candidate is like by monopolizing the interview talking about your company and the position. Instead, find out how the candidate thinks, and what’s important to them.

You won’t learn much about a candidate if you ask closed-ended questions such as “I see you have 2 years of secretarial experience, is that correct?” The answer to closed-ended questions will be either “yes” or “no,” and you learn nothing. The better way is to ask open-ended questions that enable you to learn about the candidate’s interpersonal traits. An example of an open-ended question would be “tell me about your experience as a secretary.” Then you follow with “tell me more,” “how did you feel about your job” and “why do you say that?” There are many interpersonal traits, and you can develop your own list of interpersonal traits that you feel are important. In a future article, I'll share with you a sample list of interpersonal traits that you can use when you're interviewing a prospective employee.

How do you learn about an individual’s interpersonal traits? You have to ask them. Let’s look at the interpersonal trait “common sense.” You can ask the candidate whether they have ever thought about how so many people seem to lack common sense. (You yourself have thought about this because you have common sense and can recognize those that don’t). If the candidate answers "no" to this question, then there’s a good chance they are one of those people who lacks common sense. If they say yes, then they probably have it. You can then ask them to tell you about their experiences that show that they have an abundance of common sense.

If you want to find out whether the candidate takes risks, ask whether they have ever in their career taken a risk, and if so, to tell you about it. If you want to find out about any of the candidate’s other interpersonal traits, ask the candidate to rate themself on a scale of 1 to 10. If they say they’re a “7" when it comes to organizational skills, ask them why they say that. Ask why they didn’t give themself a “10.” Remember to ask open-ended questions, such as “why do you say that,” and be sure to ask for examples.

These interpersonal traits tell you what kind of person the candidate is. As you find out about the candidate, you yourself should be rating each of their interpersonal traits from 1 to 10. After you’ve spent the first part of the interview finding out about the candidate, if you feel that they would be an asset to your company, you can then continue the interview the usual way by asking about their education, job experience and skills.

Use the same interviewing technique with each candidate. Add up the numbers you used to rate each candidate, and determine which one has the highest rating. This gives you a basis for comparing candidates so you can decide which individuals will fit within the culture you want your company to have.

In my next article, entitled "Open-Ended Questions For Interviews," I'll share with you some specific questions to ask, including my all-time favorite, which is: "If I were to ask your current boss to tell me the one thing you do that drives him crazy, what would he say?"

Have you ever had an employee come into your office, ask if they could speak with you, and then announce that they’re leaving in two weeks to join another company? If you’re like most employers here in Delaware or elsewhere for that matter, you probably thought to yourself “Oh no, not again.” The idea of taking time from your work to place want ads, review resumes, interview candidates, and train somebody new is enough to make you ill. This is especially true if it’s commonplace in your office for employees to stay one or two years and then leave. The purpose of this article is to share some “outside the box” ideas about how to hire the right employees and get them to stay.

I've learned over the years that the key is to change the way your company operates by adopting a new philosophy. Adopting a new philosophy allows you to develop a different culture. And from the culture, you can go on to develop a structure. What do the terms “philosophy,” “culture” and “structure” mean? Your company’s “philosophy” refers to the way you think about your employees and their value. The term “culture” defines who you are and reflects your company’s philosophy by the way you say things and by the way you do things. The term “structure” is all of the tangible things that make up your organization, and it includes salary, benefits, equipment, workspace, etc.

If the way you think, the way you say things, and the way you do things are wrong, you'll most likely have employee problems within your company. What most businesses in Delaware as well as throughout the country do is to focus on the structure first, and let the culture and the philosophy flow from the structure. This leads to the old way of thinking that if you pay your employees more, and if you add benefits, they will stay. This is simply not true, because higher salary and better benefits are great for the short run, but they don't have staying power. When it comes to retaining your employees, tangible things like salary and benefits are not enough without the right philosophy and the right culture. If you’ve looked at resumes in the last few years, I'm sure you've noticed that many employees no longer stay with one company for more than a year or two. And, the reason why so many employees quit is that they're searching for more than just the tangible things. If you want your employees to stay, you have to adopt a culture which provides intangible things that are important to your employees.

Let’s face it. Most business owners have no education or training in the area of dealing with employees. However, even without that education and training, you no doubt recognize that to have a successful business, you must have a philosophy and a mind set that focuses on your customers. What you may not recognize is that your most important customers are your employees. This is so crucial to the successful hiring and retaining of staff that I will say it again. Your most important customers are your employees. Once you change your philosophy by treating your employees as your most important customers, all the things that make up the right culture will begin to fall into place. This, in turn, leads to hiring the right individual for your company, and retaining that individual for many years.

In my next article, I’ll talk about interviewing new employees.