Reduction in lease in Exchange for labor arrangements?

[Trboatworks]

Has anyone entered into one of these arrangements along the lines of “if you mow the lawn I will reduce the lease“?

In my case the offer is more along the lines of “if we ask you will provide labor for free“.


Nothing to define what type of labor or how much or anything.

Weird eh?


So the question stands – has anyone entered into one of these reduction in lease in exchange for labor arrangements?
If so how did it work out?

 

[Comatose]

I'd say taking on an unbounded liability in exchange for a finite monetary benefit is always bad business.

Also a fertile breeding ground for resentment. Hard pass.

 

[CITIZEN F16]

I also have a feeling they won't value your time as much as your other customers do. I give it a big fat NO!

 

[newtonsapple]

This is a silly arrangement. Unless there is a tax benefit to either party by shifting the form of revenue and expenses or something similar it doesn't make sense.

Set an hourly rate. Rent is the rent. Provide guaranteed availability of X number of hours per month in exchange for a monthly retainer. If you are unable to meet the guaranteed availability, monthly retainer is forfeited, payment for hours actually worked still due.

 

[Garwood]

I had landlords (a married couple) that seemed friendly at first. They occasionally asked for my help with things and I did. From unloading things with my forklift to back breaking lifting. Even peeling their smashed dog off the road when they left their gate open.

When they found out I was shopping to buy my own place they jacked the rent up 50%. They blocked my shop access regulalry so they could show the property without my permission while I was working. They did a long list of super shitty and petty things right at the end. They trumped up a huge list of bullshit charges and sued me over it after I was out. In mediation I stated my case and offered to settle for the last months rent that I withheld because they were such assholes. They settled for the rent amount.

I would provide labor at my shop rate no exceptions.

Single biggest stress reliever in my life was buying my own shop.

 

[Big B]

If your landlord is proposing a barter of cutting grass in exchange for a lower lease amount, my understanding is that the amount would still be taxable as income to the landlord. As a landlord I wouldn't do that.

However, as a landlord of single family homes I put in the lease that tenants are responsible for lawn care and snow removal. Been doing that for decades and my CPA gives it her blessing.

 

[DouglasJRizzo]

Has anyone entered into one of these arrangements along the lines of “if you mow the lawn I will reduce the lease“?

In my case the offer is more along the lines of “if we ask you will provide labor for free“.


Nothing to define what type of labor or how much or anything.

Weird eh?


So the question stands – has anyone entered into one of these reduction in lease in exchange for labor arrangements?
If so how did it work out?

I've had similar arrangements in the past and am considering one like that now.
It works ok - IF - you have an understanding as to "what" and "how much" labor is needed.

The situation that is presenting itself now, is a VERY low cost lease in exchange for about 1-2 evening's worth of simple CNC work at most.
I consider this very reasonable and may just jump at the chance.
EVERYTHING is in the discussion phase right now and WILL be put in writing.

The last time it worked out OK too.

 

[broke]

Too much room for hurt feelings.

I help friends and they help me but if there is anything related to business I charge full price and I make sure I pay them full price. I've heard too many complains from other people to do it any other way.

Let him charge you full price for rent and you charge him full price for the work you do.

 

[Steve's Hobby]

It's called Manipulation-"the action of manipulating someone in a clever or unscrupulous way

 

[Rocketdc]

There's only three reasons they would make an offer like this:

1. They're so proud and honored to have you as a tenant they've decided to finally reward you with a small gesture of generosity and don't plan to ask for much in exchange for the lowered lease rate.

2. They're honorable people and feel that market rates for your labor, what they plan to ask for from your end and the corresponding lease reduction is a less formal, yet equitable, exchange.

3. They're sheisty cunts that know the value of what you bring to the table far exceeds the paltry lease reduction they're offering and plan to totally play you for a bitch full well knowing they hold the cards and could potentially kick your ass to the curb at a moment's notice if you don't carry out the orders from above.

1. = unlikely
2. = sure, ok, then why bother switching the lease? You both can continue paying to play, except there's no grey area...
3. = If Vegas was doling out odds they would slap the negative odds on this position

 

[Bondo]

I personally have never done this as so many people now already use me for freebies.

I did have a friend who lived nearby, and his rental was just like this. He did little things like fix the door, replace a couple of outlets and such. When it came time to fix the well, the landlord asked for an estimate. The landlord paid for it all as long as my friend would make sure it was all done right from the contractor. This rental lasted 5 years.

But this is the only good thing I have ever heard of working out for both parties.

 

[memphisjed]

I worked for a shop that had near free or better than free rent. It worked out well for both parties- not necessary free labor, but when I did work for the building owner/bigger shop I was paid by them. I got to learn about fiberglass mold making and a little on production, so win win for me at least. They would have me build mold skeletons out of steel, which they had no means to do - so win win for them.

 

[plastikdreams]

I worked for a shop that had near free or better than free rent. It worked out well for both parties- not necessary free labor, but when I did work for the building owner/bigger shop I was paid by them. I got to learn about fiberglass mold making and a little on production, so win win for me at least. They would have me build mold skeletons out of steel, which they had no means to do - so win win for them.

I always told my tenant if he did anything to the apartment let me know how much and take it off the rent...he always did stuff and never charged me.

I haven't raised his rent in 8 years, my parents hadn't raised it in years before that lol.

 

[CarbideBob]

So sort of like a triple net lease?
That way common here in industrial along with single and double net.

 

[john.k]

I would be OK with a mow the lawn agreement......having owned property ,this can be a big cost if you have to get a professional (franchise) maintenance operator to do it.....There is no doubt if the lawn is mowed or not,and in any case ,specify how many cuts per year are agreed to.

 

[Trboatworks]

One thing this brought to mind for me is what to do if I decided to close the doors.
Whew what a job to sell off the tooling and equipment.
I now feel right at home with those who have posted over the years about selling off a shop full of gear- it looks like months of work unless one just pushed it all to the curb with a free to good home sign on it.

 

[Bobw]

One thing this brought to mind for me is what to do if I decided to close the doors.
Whew what a job to sell off the tooling and equipment.
I now feel right at home with those who have posted over the years about selling off a shop full of gear- it looks like months of work unless one just pushed it all to the curb with a free to good home sign on it.

Take a month just to push it to the curb.

 

[garyhlucas]

My first shop after leaving the electrical business was a mold shop set up by a greenhouse that didn't work out because the injection machines he bought from a bankrupt company were obsolete. He told me I could have the shop for free if I just handled the emergency stuff for his automation. We went in the shop and every machine was still under power 6 years after he locked the doors! No heat so all the machines were rusty. I hired an old friend of my dads and we cleaned the machines up over three weeks or so, and every machine was broken in some way, so we repaired them all. I had use of a Beaver mill, a Bridgeport, a horizontal band saw, a vertical band saw, a surface grinder, a 12" swing lathe, and an Arboga drill press.

I was there 4 years and would have stayed except the old lady behind us saw lights one night and climbed through the bushes to look through the window. She then came over and said we couldn't have a machine shop there and that the building was very ugly in here backyard. I asked her how long she had lived there and she said 25 years. I said the building was there for more than 60 years so it was ugly when she moved in. She went to the town and they tossed us out without even meeting with us. One of my customers was the school board and there was a school on the other side of our fence. They would hand me stuff through the fence to repair!

When we left the owner was able to sell all the now repaired and operating machine tools and they scrapped the molding machines.

 

[john.k]

Last year I went thru a complete disposal of a massive accumulation of shop stuff.....I had already sold a small portion of the hobby sized stuff.........and then I have to contend with "ya cant scrap that its (insert reason here)".......one guy I know even had a tantrum over scrapping a crankshaft grinder ....I offered him the grinder free...he s got nowhere to put it......well ,he would ,except his shed is crammed with junk.(this assumes amphibious jeeps stacked 3 high could be called junk)....anyhoo,even scrapping everything,it took me a year (on and off) to clear the yard.

 

[snowman]

there are plenty of situations such as this that do work, but you have to have realistic expectations ahead of time, clear communication and pretty clear boundaries.

it's not something i'd be able to enter into lightly in today's business climate