What is included in a commercial lease?

On Behalf of | Oct 2, 2024 | Business Law

Finding suitable premises to lease in the right location at the right price is one of the many challenges you will face as a business owner. And, as with any business transaction you need to be sure what you are getting into before you sign the contract.

One of the things you must understand is exactly what the lease does and does not include. The extras on some leases can soon add up, making them far more expensive than they first appear, and leaving unwary leasers unable to turn a profit. Fortunately, the variables are not that difficult to understand.

Most landlords use net pricing

When you find a lease it will typically be a net lease as most landlords shy away from gross leases due to how much bills can fluctuate. However, there are several versions of a net lease:

  • Triple net leases: These are typically the cheapest on initial inspection. That is because the landlord has left more things out. In addition to the basic monthly price, you will need to stump up for property taxes, insurance and any maintenance the property requires.
  • Double net leases: These sit in the middle of the other two. Insurance and property taxes will be your responsibility, but maintenance won’t.
  • Single net leases: These may appear expensive at first glance, but that is because they already include insurance and maintenance. You will still need to pay the property taxes but that should be about it.

Getting the figures right is crucial in any business transaction. Seeking legal help to ensure you fully understand the terms of a commercial lease can increase the chance your business venture succeeds in its new premises.

Archives

Serving California’s Businesses and Individuals

Years