How to handle a conflict of interest with a supporting business colleague in the same office?

Question

I am a residential designer providing home plans to builders and homeowners. I rent my office from an engineer who provides all the engineering for the plans I design.

He recently hired an employee to help with the workload. As the work slowed seasonally, he needed to keep the employee busy. He began designing houses to create a portfolio of plans he could then market and sell. He has done this without consulting me.

I've been renting from him for almost 12 years and designing for 20.

I'm not aware of him actively marketing the plans to any of my customers yet but, I can only assume he has or will be.

I don't wish to pack up and move out. He is always the type of person that sees things only through his own lens. I don't know how else to get through to him.

How should I handle the situation? Is there any good advise?

Answer 1

If it concerns you that much, you could certainly pack up and move out. But you don't want to do that, and it's hard to see how that could help anything anyway.

You shouldn't assume that your landlord wants to steal your clients. Still, I'm assuming you don't have any sort of formal agreement that would prevent him from doing so. Thus, your best approach would be to talk.

You could say something like "Hey, I noticed you have started to create a portfolio of plans." and then listen for the reaction and take it from there. Depending on his attitude, there may be a possibility of a joint venture, or a strong adversary. You'll only know by opening up the discussion.

If you truly believe that his intent is to steal your customers, then you will want to take action to bolster your brand, reach out to clients, and make it harder for him to compete. These are all things you would do if the potential competitor worked down the road, rather than in the same office.

And you might have a chat with your lawyer to see if there is anything that could help you legally. It seems doubtful, but a good lawyer may be able to come up with something to prevent (or at least delay) the competition you see coming. Sometimes a rental agreement has a clause preventing competitors from also renting an office. That might be a viable approach.

It might also make sense to start scouting out new offices. If your fears are well-founded, I suspect you don't want to rent an office from a competitor. It's also possible the new competitor will kick you out.

Answer 2

A conversation along the lines of "If we are in direct completion on marketing home plans now, we'll need to re-examine other aspects of our business relationship" should push him out of viewing only through his own lens. That said engineers are notorious for lack of empathy, so be sure that you are approaching this from the angle of "I don't want to be so closely enmeshed with the competition" rather than the angle of "I'm hurt that you took this direction".

Before having that conversation be sure what steps you will need to take if things fall apart with him (finding a new office, finding a new engineer, whether there are any proprietary entanglements on your existing designs, etc).

Answer 3

For the last 12-20 years he got all your engineering business and you got all his design business. I understand if you did not have a formal agreement.

It appears he is going to get into the design business and compete directly with you.

Point out that you will be in competition on design and ask him how he sees that working?

You need to decide if are going to continue to rent from him and if you are going to use him for all your architecture work.

If he is going to openly market design it would be confusing to any of your customers that come to the office.