Before you sign that lease on your business space here are some questions you need to get the answers to.
- Does the lease explain how any disputes will be handled?
- Will the landlord be requiring non-disturbance agreements from future or current lenders?
- If required repairs are not made timely by the landlord can the tenant make those repairs and get reimbursement from landlord through deducting cost from rent.
- Are remedies defined for cases where use of the building has been interrupted such as cancellation of lease or rental abatement.
- Do the terms of the lease give the tenant the right to audit the records and books of the landlord?
- Does the lease require the landlord provide a CPA prepared list of expenses in support of any rent increases?
- Have the base year expenses been adjusted for full occupancy or do they reflect full occupancy?
- Are there specifications in the lease as to the buildings square footage and the total square footage of the premises that is rentable?
- What is the tenant’s share of expenses based upon? Total square footage of the building or the square footage being leased by the landlord.
The Language of the Lease
| Lessor | Landlord |
| Lessee | Tenant |
| Right of First Refusal | Before vacant space is rented to someone else, landlord must offer it to the current tenant with the same terms that will be offered to the public. |
| Gross Lease | Tenant pays flat monthly amount; landlord pays all operating costs, including property taxes, insurance and utilities. |
| Triple Net Lease | Tenant pays base rent, taxes, insurance, repairs and maintenance. |
| Percentage Lease | Base rent, operating expenses, common area maintenance, plus percentage of tenant’s gross income (most common for retailers in shopping malls). |
| Sublet | Tenant rents all or part of space to another business; tenant is still responsible for paying all costs to landlord. |
| Assign Lease | Tenant turns lease over to another business, which assumes payments and obligations under the lease. |
| Anchor Tenant | Major store or supermarket that attracts customers to a shopping center. |
| Exclusivity Provision | Shopping center can’t lease to another who provides the same product or service that existing tenant does. |
| CAM | Common area maintenance charges including property taxes, security, parking lot lighting and maintenance; may not apply to anchor tenants in retail leases. |
| Nondisturbance Clause | Tenant cannot be forced to move or sign a new lease if building or shopping center is sold or undergoes foreclosure. |
March 17th, 2008 at 2:55 pm
[...] any rental or lease agreements pertaining to the [...]
May 5th, 2008 at 12:00 pm
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