What are the terms of a commercial lease
When undertaking a commercial lease there are few terms that need to be understood so that it is easier to negotiate the terms and conditions of the lease.
The first term in a commercial lease agreement is the lessor. The lessor is used to denote the person who is the grantor of the lease. This normally is the term to denote the landlord or the owner of the property but it can also denote the property management company.
The lessee is the tenant.
The Common Area Maintenance is the term which does not mean the part that is leased but it means the parts which are common areas such as hallways, stairways, walkways. The lessors add this common area maintenance to the cost of the square foot when they are calculating the lease payments.
Fully serviced leases which include everything including the maintenance, utilities, as well as, lawn maintenance or snow removal. These fees are paid by the landlord.
A Gross Lease is the lease where the landlord pays for utilities, repairs as well as property taxes and insurances. This lease type is the most expensive as all the items are part of the lease. A commercial lease where the square foot cost, common area maintenance as well as the ownership expenses are all included is called net lease.
A double net lease is when the taxes as well as insurance costs are not part of the lease payment and the lessor need to pay maintenance cost.
HVAC is the term used for heating, ventilation and air conditioning.
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