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| Commercial Real Estate |
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Commercial Leasing
Commercial leasing is different from residential leasing, and it comes in two basic types: net lease and gross lease. In net lease, your rent payment is only for your entitlement to occupy the office space. Fees for maintenance, premiums for insurance and property taxes are not included in the net lease agreement. There is no need to pay all these fees in a gross lease, since you will only have to pay a single payment that covers rent and all other fees.
Items to Examine In a Lease Agreement
In a commercial lease, you must scrutinize the following items before you sign an agreement:
- Term, or the length of lease. Majority of the commercial leases are between 5 and 10 years, instead of one year.
- Amount of lease, and the interval when the landlord may raise the rent
- Check if it is a net lease or a gross lease, as stated above
- Security deposit amount and the conditions that allow/disallow its return
- The exact measurement of the space (in square feet/meters)
- The provisions on how improvements and modifications in the premises will be managed and who will shoulder the payment for them.
- Who will take care of the maintenance and repair of the premises
- Whether there exists an option for lease renewal or space expansion
- The process on lease termination, as well as its notice requirements and early termination penalties
Permitted Uses
In a commercial lease agreement, there are usually clauses that clearly state the ways you can use the rented property. A landlord may choose to state these clauses by either listing all the things that you are not permitted to do during your term, or listing all the allowed things you can do while staying in the premises.
In case you need to store some hazardous or waste products in the premises, or your activities generate significant levels of vibrations, noise, and odors or other forms of environmental pollution, be sure to inform the landlord about these and have them stipulated as permitted uses in the lease agreement.
Since commercial leasing is not covered by majority of the consumer protection laws, you may want to talk to an attorney prior to signing any agreement to the effect in order to protect your interests.