Top FAQs about Commercial Lease Agreements

Whether a landlord or tenant, a commercial lease agreement is a significant commitment. You might have many questions about how these contracts work. This post will cover some frequently asked questions about commercial lease agreements.

Common FAQs for Commercial Lease Agreements

What Types of Properties Have Commercial Leases?

Commercial leases are for properties businesses may use for various operational purposes. These properties may include retail space, office space, industrial facilities, and more. You may also find single-tenant and multi-tenant properties in these categories.

How do Residential and Commercial Leases Differ?

Residential and commercial leases have some similarities and significant differences. While residential leases typically last a year, commercial leases generally run longer. Commercial leases usually have more room for negotiation, while residential tenants typically have more legal protections.

What are Common Commercial Lease Types?

Common types of commercial leases include gross, net, and percentage leases. Each offers terms to cover rent payments and expenses. With a gross lease, the tenant pays a base rent that covers all property expenses. Under net leases, you may have different terms that pass property expenses like taxes, insurance, and maintenance onto the tenant. Percentage leases have the tenant paying a base rent plus a percentage of their revenue at the property.

Can You Sublet a Commercial Property?

Some tenants sublet their property for various reasons. Subletting is subject to the terms of the lease agreement. Even if the agreement allows for subletting, it typically requires approval from the landlord and may also place various restrictions on subletting. The original tenant may also remain liable for the lease terms.

What are the Key Terms to Look for in a Commercial Lease?

Landlords and tenants should be familiar with the basic terms of commercial leases. For example, base rent refers to the amount of rent the tenant will pay. The lease term covers the duration of the lease. Permitted use outlines the ways the tenant may use the property. While these are the basic terms, there is more to know. You can learn more about commercial lease terms in this post.

How Long are Most Commercial Leases?

Commercial leases are typically longer than residential leases. Standard lease terms are from three to five years. However, longer terms of up to ten years or more might be appropriate for some tenants or property types.

What’s Covered Under a Commercial Lease?

What a lease covers is mainly dependent on its structure. Gross leases tend to cover all operating expenses for the property. With net leases, some or all operating expenses go to the tenant. However, some properties may also include other services under the lease. For example, some properties might have security, parking attendants, or janitorial services.

Do you need help with commercial lease services near Lake Havasu? Click here to contact Shuffler Commercial Real Estate. Our team can help property owners and businesses negotiate leases and determine the terms they need. Reach out now to learn more.

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