It is my opinion that a landlord should use common sense, obliviously if a large professional firm or a long time local doctor wishes to lease a commercial space a simple three trades and bank reference is all it should take.
However if the firm is new or wishes you to not to speak with the current or past landlords a full background check is recommended. One needs to get a picture of the firm's current and past business practices; it's not all about their "credit". This is not the place to take a "step of faith" as the consequences may be disastrous and expensive.
Case in point:
A commercial building owner advertised a 30,000 sf building for lease. A firm with very experienced businessmen portray being in business for a very long time and capable of paying the asking rent. The firm signs the landlord's standard lease and pays the asking rent with a full security deposit.
All is well for a few months, payments are being made on time and the off site landlord feels good about having a tenant. A few months later the landlord discovers an unapproved subtenant is occupying a portion of the space, however all is still well and the rent is paid.
A few more months go by and the rent stops being paid to the owner, the typical excuses are conveyed. The firm name changes, the officers of the new firm aren't the same as the old firm name, and telephone calls aren't being returned. The owner contacts an Attorney who requires a retainer to handle collecting the unpaid rent etc. The Attorney has a hard time untangling the corporate ownership as his fees grow.
Upon visiting the facility the owner discovers the power has been turned off, the no human is on the premise and the facility is completely packed floor to ceiling with remnants of disposable diaper material.
Prior to exercising their landlord rights an official eviction must take place on the non existent tenants. The owners out of pocket expenses continue to grow.
Unbeknownst to the owners the disposable diaper material is not easily or inexpensive to remove and be disposed, the lowest estimate to date is approximately $25,000.
A complete background check for a few hundred dollars on the firm and its principles may have avoided this serious situation. Most people who would take advantage of a building owner have done it before and that information can be uncovered by a background professional.
I recommend to all the owners that I represent that they do such a background check. Usually a full credit, civil, criminal (GBI, FBI and local) & motor vehicle check takes only a few days.
For consult the firm I normally utilize is:
Turnstone Background Services
(770) 457-4776 -----(404) 725-1847 mobile
J. Stafford Durham Ph. D.
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