SOHI LAW GROUPCommercial Leasing & Licensing Agreements

Although there is no standard commercial lease agreement, there are typically common terms and points covered by most commercial leases. This includes but not is limited to rent, term, space and services.

Rent

Commercial leases involve different types of rent calculation.

• Percentage rent – Requires tenants to pay a base rent plus a percentage based on sales.
• Gross rent – consists of a flat rate, also known as base rent, and other specific expenses. In this case, the landlord is responsible for other operating costs.
• Net lease – tenants pay a base rent and some of the taxes as a part of the rent. The rent for a net-net lease includes base rent, taxes and insurance, whereas a triple-net lease requires tenants to pay taxes and maintenance costs on top of the base rent.

Term

This section is relatively straightforward.

It stipulates the time period tenants will occupy the premises, which can be month-to-month, or for a longer term. The clause may also include renewal options upon the end of the lease.

Space and services

It is important that tenants understand how the landlord calculates the unit space.

Some questions that tenants should ask:

• Is the price is based on the actual square footage?
• Are services such as parking, heating, ventilation, cleaning services and air conditioning included?
• Whether the space measured is accurate.

Inquire about smaller spaces first then move on to bigger ones.

There are also some other items for tenants to consider before signing a commercial lease agreement:

• Repairs
• Insurance details
• Taxes
• Utilities.