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Understand commercial lease terms before you sign

by | Mar 12, 2020 | Real Estate Law

When you want to lease a spot for your business, you might be shocked to learn about all of the different things that go into a commercial lease. Making sure that you understand the lease in its entirety is critical, and it must occur before you sign anything.

There are several things that are different on a commercial lease than they are on a residential lease. This includes things like common area maintenance. This is a fee that you will have to pay when there are things that need to be done. Sometimes, it is a standard monthly fee that won’t ever change. In other cases, you might pay a monthly fee and then a portion of other expenses.

Many commercial leases are called “triple net” leases, which means that they include your base rent, a portion of the property taxes and the common area maintenance fee. Some will also include capital expenditures, which are major expenses like roof replacements or HVAC replacement.

On top of these expenses, find out about how the utilities are handled. These are sometimes paid to the landlord and might be based on the amount of the building’s available space your company uses.

You also need to consider any clauses that have to do with modifications. You need the space to work for your company so if you can’t modify it, there is a chance that you won’t be able to make it work for you. If modifications are allowed, find out how the cost is handled because this might add considerable expense to your overhead.