Commercial Lease Agreement
A Commercial Lease Agreement is a written document that sets down terms, rules and obligations between the Landlord and Tenant. Rent is the consideration paid by the Tenant to the Landlord in exchange for the exclusive use of the property.
You should know that there is no such thing as a standard lease form. The results of negotiations between the landlord and potential tenant usually determines the contents of the final agreement. However, all lease Forms must contain certain basic elements.
Some of these essential basic items of the agreement should be the property address, start and termination dates, names of all parties involved including their signatures, the rental amount and all deposits. The rental amount is usually stated in terms of the monthly rent. It is common for the monthly rent amount to be based upon an agreed sum per square feet of rental area.
The agreement can be for any length of time and is often referred to as a short or long term lease. A short term lease is usually 1 year or less, however, this is a matter of interpretation and can sometimes be as long as 3 years. Many short term leases require the tenant to pay a fixed monthly rent. This is referred to as a GROSS LEASE.
Most long-term leases usually require tenants to pay increases in the monthly rent. These rent increases are established to compensate the owner for rising costs such as property taxes, insurance, utilities and maintenance. When there are provisions in the lease for the tenant to pay these rent increases, the lease is referred to in the following manner.
1. DOUBLE NET LEASE: Tenant pays property taxes and insurance.
2. TRIPLE NET LEASE: Tenant pays property taxes, insurance and common area maintenance.
3. QUADRUPLE NET LEASE: Tenant pays property taxes, insurance, common area maintenance and utilities.
