There are many different ways to structure a commercial lease. It is very important for both the landlord and the company owner to understand exactly what they’re agreeing to and what obligations they will have. This is especially true with commercial properties because the business has certain operating costs and a set budget that those costs must fit within.
One thing to consider is how many “nets” are included in the lease. These help divide financial obligations for the property.
For example, a single-net lease requires the tenant to cover property taxes. They also have to pay the monthly rent. A double-net lease means that the tenant also has to pay the insurance premiums for the building.
A triple-net lease
A triple-net lease assigns the most financial responsibilities to the tenant. Not only do they have to pay the rent, property taxes and insurance premiums, as noted above. But on top of that, they are required to cover the operating expenses, the utilities and much more. There are a lot of overhead costs when running a business. A triple-net lease reduces obligations for the owner.
Any type of lease can work, depending on the specific needs of that company. It is just important for the property owner and the tenant to know what they’re obligated to pay. If a commercial tenant believes that all they have to do is pay the rent when they also need to be paying for utilities, insurance and general upkeep, they’re quickly going to find that the building doesn’t actually fit the business’s budget.
Commercial leases sometimes lead to disputes and legal complications. It’s important that those involved know what steps to take.