What you Need to Know when Setting Up a Commercial Lease

Setting up a commercial lease can be a very common process when beginning a property contract. It’s very important for both the owner and the tenant that they understand everything before they sign anything. Commercial leases tend to be a little overwhelming and are often long and complicated lists of terms and conditions which can sometimes be intimidating and confusing for both parties.

What is a Commercial Lease?

A commercial lease is an agreement set up between the owner and the tenant. These types of agreements are normally set up when leasing a commercial property such as an office, store, or industrial property. The agreement states rules and terms that the potential tenant needs to confirm they agree with in order to rent the property. Not all leases follow the same structure but most contain the same important points. To find an example of a standard commercial list you can visit this website.

Lease Options:

There are two different types of lease options in a commercial leasing agreement.

  • Net lease – this is where the tenant signs that they will pay a set rent figure and a percentage of the landlord’s expenses to run the property. This also includes a monthly tax.
  • Gross lease- this is where the tenant agrees to pay a set amount of rent as well as the landlord’s expenses. To find out more about different lease options you can read more here.

Lease Terms:

Not all leases follow the same structure but most contain the same important points. This normally covers basic rules such as agreeing not to set up any illegal activities in the property. Most leases are written to benefit the landlord rather than the tenant so be sure to read everything fully before signing anything. Depending on how the agreement is drawn up you should be able to negotiate and change terms with the landlord but often the landlord is not willing to change anything. When signing an agreement the tenant is often required to pay for the first and last month’s rent along with a deposit. This is to give protection to the landlord incase the tenant decides to leave early without giving any notice.

Before you sign a commercial lease be sure to read all the terms in full and have a lawyer who is specialized in real estate and commercial property go over it with you to be sure everything in the contract is legit. To get more information on commercial leasing and more real estate advice click here.