Nadel & Ciarlo, P.C.

There is more than 1 type of commercial real estate lease

If you are in the process of searching for commercial real estate to lease, it's important that you remember one thing: There is more than one type of lease. By keeping this in mind, you'll know exactly what you are negotiating when it comes time to do so.

Here are some of the most common forms of commercial real estate lease:

  • Fixed lease: A set rent amount is predetermined for a specific period of time (such as five years)
  • Gross lease: The tenant pays a flat amount, with the landlord paying for operating costs associated with the building
  • Step lease: The rent increases over the life of the lease, such as every year
  • Cost of living lease: The amount of rent is directly tied to the cost of living
  • Percentage lease: The tenant pays a set amount plus a percentage of gross income

With so many different types of leases to consider, it's important that you learn more about the finer details of each one. You don't want to assume that you are signing one type of lease, just to find out at the last minute that this isn't the case.

The best thing you can do is review the lease in its entirety, as to ensure that you understand your legal rights now and in the future.

If you ever find yourself in a commercial real estate lease dispute, you should take the time to understand what's going on. This often starts with reviewing your lease to better realize where things stand and what you can do to protect yourself. An attorney experienced in real estate law can be very helpful.

Source: FindLaw, "Types of Leases," accessed Nov. 09, 2017

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