Commercial leases are often more complex than a residential lease. If you’ve only ever dealt with leases for an apartment or personal rental, then it is important for you to familiarize yourself with the aspects of a commercial lease.
One thing you need to understand upfront is that there are three different types of commercial leases that you may come across.
According to VTS, a net lease is one where you will pay rent and some other costs as part of your rent payment. It can be a single net lease where you pay for rent and property taxes together. The landlord may then cover other expenses related to the property, while you pay for things directly related to your space, such as utilities.
It may be a double net lease, which is where you pay property tax and insurance as part of your rent. Lastly, is a triple net lease. This lease includes insurance, property tax, and maintenance expenses for common areas.
Full Service or Gross Lease
A full service or gross lease is one where you pay rent that covers all expenses related to the property. The landlord will then take the money to pay the individual expenses, which may include:
The benefit of this type of lease is that you know what you will pay in full each month with no other extra bills you will need to handle. However, because it encompasses all the costs of the building and the rent, it will be more expensive than rent under other types of leases.
Modified Net or Gross Lease
A modified net or gross lease can be like a net or gross lease. It allows you to negotiate what expenses go into your rent payment. You may want to consult with an attorney that understands real estate and business law Shelby Township MI.
The Bottom Line
Each type of lease has its pros and cons. You need to consider your situation and what works best for you when determining which type of lease you want.