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Types of commercial leases

On Behalf of | Feb 10, 2019 | Real Estate

There may be a number of retail spaces available for lease in the area of Indiana where an entrepreneur wants to open a business. A major factor in choosing the right one is what kind of commercial lease the landlord offers. 

Per FindLaw, a net lease typically has the tenant paying for some of the building’s operating expenses as well as the monthly rent. These expenses reflect the actual amount rather than an estimate, so when the cost to the landlord goes up, that is passed on to the tenant. A double net lease usually includes taxes and insurance as well as utilities and other expenses. A triple net lease will probably require the tenant to pay for maintenance and repairs as well.

A gross lease is not usually based on actual expenses. Instead, the tenant would pay a flat amount that includes the landlord’s estimates of the costs on top of the base rent. The actual costs are then taken care of by the landlord. When costs increase for the landlord, the base rent could be raised.

Often, in multitenant buildings, the landlord offers a lease that is a modified version of the gross lease, explains Forbes. There is an amount set as monthly rent, and then the flat amount added to that includes operating expenses. However, the landlord typically splits these with the tenant. So, the tenant may pay a fixed amount to cover the operating expenses and repairs listed in the contract. 

Regardless of the type of lease that is offered, business owners should be prepared to negotiate for the terms that will suit their needs and to walk away from the deal if it does not.


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