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In the Spotlight: How to Negotiate Overtime Payments for Services
Office leases typically provide that the landlord will furnish services without additional charge, including heat, ventilating, and air conditioning (HVAC) during 'normal business hours.' Many leases specifically denote such hours, sometimes including up to 6:00 p.m. on weekdays, and also Saturday mornings. These hours are usually not controversial, but certain tenants sometimes negotiate the specific hours. The potential problem for tenants is that many leases state that a tenant will be billed for overtime HVAC (or other services) without specifying a rate for such services. This ambiguity allows unscrupulous landlords to gouge tenants for overtime services. A well-crafted provision should either specify the actual hourly rates to be charged by the landlord or provide for a fair mechanism to determine such rates. Asking for the specific rates in advance is prudent, depending on a particular building's floorplate and mechanical systems, overtime HVAC can be very expensive, and tenants should be aware of the expense before they sign the lease. At the very least, the landlord should be limited to charging the tenant for its actual out-of-pocket expenses, with no mark-up for profit or an administrative fee. A savvy tenant should also require the landlord to make such services available according to reasonable procedures, such as a phone call to the building manager, or the flip of a switch, as opposed to advance written notice to the landlord.
William Crowe is a partner with Mayo, Gilligan & Zito in Wethersfield, CT.
Office leases typically provide that the landlord will furnish services without additional charge, including heat, ventilating, and air conditioning (HVAC) during 'normal business hours.' Many leases specifically denote such hours, sometimes including up to 6:00 p.m. on weekdays, and also Saturday mornings. These hours are usually not controversial, but certain tenants sometimes negotiate the specific hours. The potential problem for tenants is that many leases state that a tenant will be billed for overtime HVAC (or other services) without specifying a rate for such services. This ambiguity allows unscrupulous landlords to gouge tenants for overtime services. A well-crafted provision should either specify the actual hourly rates to be charged by the landlord or provide for a fair mechanism to determine such rates. Asking for the specific rates in advance is prudent, depending on a particular building's floorplate and mechanical systems, overtime HVAC can be very expensive, and tenants should be aware of the expense before they sign the lease. At the very least, the landlord should be limited to charging the tenant for its actual out-of-pocket expenses, with no mark-up for profit or an administrative fee. A savvy tenant should also require the landlord to make such services available according to reasonable procedures, such as a phone call to the building manager, or the flip of a switch, as opposed to advance written notice to the landlord.
William Crowe is a partner with Mayo, Gilligan & Zito in Wethersfield, CT.
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