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Laundry room lease: contract or constraint?

Laundry room lease: Contract or constraint?

The superintendent was not aware of this occurrence because the water loss was spilling out underground and nobody could see it.

The lease between a building and a laundry service company is a working agreement that clearly defines what is expected from both parties during a specified time period. It is not a life sentence, or a constraint that makes it impossible to select a new company if you are dissatisfied with your service. The right of first refusal clause that appears in the lease agreements of some laundry service companies is a constraint and violates the spirit of trust and customer satisfaction that underlies the contract.

At the time of lease expiration or renewal, this clause affords the laundry company the right of first refusal to meet any bona fide bid to lease the laundry room. Essentially, the clause may be used to attempt to restrict a change of the service provider, or at the very least stall the process of bringing in a new firm long enough to convince the owner or co-op/condo board to remain with the existing company.

This is not a question of money. It is a question of service. Come across with lousy service and you deserve to lose the deal. That's the end of it -- no renewal, period. The right of first refusal clause says that the landlord must continue negotiation with the provider, and continue an unsatisfactory relationship if the bid is matched. It's absurd, and nothing more than an attempt to use the law to bully clients into continuing with bad service.

Our experience has shown us that renewals are the direct result of excellent service and personal attention from the company principals, not from constraining clauses couched in legalese, and cleverly buried at the end of a contract. I take my hat off to Service Directions Inc., for being one of the first companies to bring this issue to the limelight by helping a co-op board achieve an out of court settlement with a company trying to exercise the right of first refusal. As an industry leader, I feel we are all entrusted with safeguarding and challenging the ethics and standards of our profession, and with informing the public about unfair practices that don't reflect the behavior of the majority of professionals in the field.

For some of us, a long list of annual contract renewals is proof of excellent service, personal attention, trust, and accountability. Boards and landlords renew because it serves their best interests, and not because they feel forced or constrained by contract clauses that they fear may plunge them into a costly legal battle if challenged.

The other day during a routine inspection of one of our laundry rooms, I overheard a conversation between two residents, the gist of which was, |Nobody cares about doing the right thing anymore, it's impossible to find anyone in this city who will do something right the first time -- everything is a hassle and a struggle..." I don't agree with this pessimistic view of business in our city, but I do think service selection is tougher than ever. The competition is on every corner offering deals that look good on the surface, but don't deliver on two important factors, personal attention and quality performance.

Maintaining a laundry room that is safe, operational, comfortable, generates revenue and makes the residents happy, is what owners and managers want. Satisfied customers will tell you what good service means. It means reaching a principal of the firm if you have a problem and not an answering machine or a recording telling you "that all reps are busy now," or that "the computers are down and your account can't be pulled up on the screen." Satisfied customers will tell you that they want the principal, or a decision-maker frequently on site, and accessible for questions, comments or suggestions.

Since day one of our business, this made perfect sense to me, and still does. If you're a laundry room expert, you belong in the laundry room. Computers are helpful tools, but they don't make decisions, and I've yet to see one make a service call. We personally supervise installations and renovations, check equipment, monitor safety and security, do collections, and keep in close touch with our maintenance personnel, because this constitutes the job, and being there in person ensures that it gets done right.

Implementing advanced technologies is part of keeping pace with the times, but it should not translate into removing trusted professionals from the front-line of service delivery. Some of our mechanics and maintenance personnel have been with Metered Appliances Inc. for over 30 years. They carry on a long tradition of pride in quality service and set an example of excellence for our newer staff.

New machinery, equipment, and techniques require advanced training which our service personnel receive on an on-going basis. The training however falls short in the area of commitment to the customer. This is something we feel comes from top management, in our direct participation and personal attention to the needs and wishes of the people who employ our firm.

Before signing a lease agreement, you may want to consider the following items and develop your own evaluation checklist for the firms under consideration:

* Number of years in business

* References and recommendations from current clients

* Lease agreement: Term -- some leases are up to 15 years, a long time to be locked into a relationship. Six to seven years is a more reasonable term. Renewal- Check for the right to first refusal clause, or any statements that attempt to limit your right to select a new firm upon competition of the lease.

* Equipment provisions -- Some vendors insist that you use one brand of machinery. Check to see if you may choose the manufacturer, or have input into this important decision.

Herbert Orner President Metered Appliances Inc.
COPYRIGHT 1991 Hagedorn Publication
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Renovation & Rehabilitation Supplement
Author:Orner, Herbert
Publication:Real Estate Weekly
Date:Jul 24, 1991
Words:982
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