BOMA standards

by Lisa
(Vancouver, BC Canada)

Our lease sets out the square footage of our suite and the net rentable area of the building. Other tenants in the building who have forgotten to exercise their option to renew have been handed new leases which increased the size of their rentable area to include hallways etc. We are negotiating our rate increase with the landlord under the terms of our old lease. They are arguing a 60% increase to our base rent because that is what they allege other tenants in the building are paying. We have obtained copies of other tenant leases which demonstrate that they were subject to a modest per square foot rate increase but that the area under the lease had increased significantly.

We feel that we should be paying the same square footage rental rates as set out in the leases of other tenants (i.e. $17/$18.00). Because they can't change the measured area of our suite they are looking to charge us $26.00 per square foot. Do you have any opinion or experience with a landlord charging an existing tenant a rate that is effectively trying to net them a certain amount of money because they can't remeasure the space and increase our square footage to include common area?

Anthony's Answer: Without seeing the lease it is hard to answer this question. I have seen landlords increase the rentable area during the term when BOMA standards changed which effectively increased the rent.

In your case, it seems that they have gone to BOMA standards but cannot apply it to your tenancy so they have increased the rent to bring it in line with market rents in the building and I suspect in the area by raising the rent to compensate. You should get an experienced lease expert to look over this lease but I would not hold out too much hope for success.