As you prepare to sign the lease for your commercial property, you may pay the most attention to the amount of the rent and the location of the property. However, you should also carefully consider the kind of lease that you sign. There are several different types of commercial leases and each has implications for your responsibilities as a tenant.
Landlords may use one of several kinds of leases. Business News Daily says that the expense of renting the property usually depends on the type of lease that you sign.
What is a net lease?
If you sign a net lease, you are responsible for paying your rent, as well as some of the operating expenses. A landlord may present you with one of three kinds of net leases. A single net lease requires you to pay the utilities, while the landlord covers the other operating costs. If you have a double net lease, you may be responsible for paying the taxes and insurance for the space. A triple net lease requires you to pay all of the operating expenses. This means that your rent may be lower; however, you will also have all the other costs associated with the space.
What is a full-service lease?
If you sign a full-service lease, then you are only responsible for paying the rent. The landlord usually takes care of the other expenses. In this situation, your rent may include the cost of your business space, as well as the common space for the building. This may include the sidewalks and any courtyards outside your property.
What is a percentage lease?
In some situations, a landlord may ask you to sign a percentage lease. You typically pay the base rent and the landlord also receives a portion of your retail sales. Landlords may only give you this kind of lease if the property is in a shopping district, such as a mall.
Because the cost of renting the property can differ depending on the lease, you should make sure that you understand the fine details before you sign.