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What costs do you have with your commercial lease?

On Behalf of | Mar 13, 2020 | Comprehensive Business Law

You decide to rent a space for your new business. You want a prime location, after all, and the company doesn’t yet have the capital to buy. You figure you can rent for a few years and then invest in a building of your own.

When you sign that commercial lease, make sure you pay careful attention to just what you’re going to owe. The terms should spell out your costs, and you never want to assume that it’s just rent.

For example, a gross lease — also called a full-service lease — means that the base rent is (mostly) all you’ll pay. The landlord will pay for insurance, maintenance, real estate taxes and the like. The expenses of the building fall on them, while your costs stay stable every month.

However, even with this type of lease, you may need to pay something toward the common areas. This can be used for maintenance. All renters may have a slightly higher total payment than just renting the space that they use, with the landlord accounting for the costs in parts of the building — like stairwells or an open patio — that no one is renting at all.

Not all leases work this way. With some, you have to pay for maintenance and upkeep on your own. With others, you put the utilities in your name and pay that separately, while paying rent to the landlord. There are many ways to do this.

The key is just to make sure you understand what your lease says and what legal obligations it creates before you sign a commercial real estate lease.


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