When it comes time to your business lease expiring or starting a new business, business owners must objectively evaluate what is in their best interest when considering a move or new location. The size, price and physical location are paramount factors in determining what‘s best for your business.
When signing a commercial lease, it is ever so important to understand which building expenses you are directly or indirectly responsible for paying, especially since these expenses could easily equate up to 50% of what the monthly rent is. If it is a typical retail store or commercial building lease, it will be a triple net lease aka NNN lease. In a triple net lease the tenant is responsible for practically every expense incurred in operating the commercial building or shopping center.
There are many types of lease forms used by the landlord community. Some are relatively short, ranging from 10-30 pages, while others can be up to 80-90 pages. Lease forms are typically described as triple net, modified gross and gross. The interpretation of how the leases are described is not always consistent within the industry and is often confusing for tenants. It important for the tenant to understand the varying lease terminology as discussed between the parties in a transaction and used in the lease itself to avoid any surprises or misunderstandings once the lease is signed. For a full glossary of terminology, visit www.theleasedoctor .com.
Unlike residential real estate where you have consumer laws to protect the buyer or lessee in a transaction, commercial real estate does not exactly fall under the same jurisdiction.
In a noncommercial real estate transaction, the agent is required by law to have myriad disclosures signed by all parties, and strict disclosure laws must be followed. In commercial real estate transactions, especially leasing, there are no specific disclosure laws or paperwork required.
With so much talk these days about loan modifications for homeowners that got into a bind with their mortgage, what about the businesses that are now stuck with an unfavorable lease? There are now a few options for business owners in this situation wishing to modify their commercial lease. This applies to large companies as…
Who pays for what? It all depends on what type of lease you have. If it is a typical retail store or commercial building lease, it will be a triple net lease aka NNN lease. In a triple net lease, the tenant is responsible for practically every expense incurred in operating the shopping center. NNN…