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Understanding commercial leases

As a Florida entrepreneur starting a new business or an established business owner seeking to add a new location, you likely will confront the necessity of signing a commercial lease. If you have previously leased commercial property, you already know that commercial leases are considerably different from residential leases.

For one thing, a commercial lease offers you far more opportunity to negotiate its terms with the owner of the property. For another, however, a commercial lease contains fewer protections for both the lessor and the lessee than a residential lease. This is because the law presumes that both of you are sophisticated business people reasonably well-versed in the complexities of commercial leases and/or that both of you will retain knowledgeable attorneys to draft your specific lease agreement.

Common negotiable lease terms

Admittedly, no two commercial leases are exactly alike. Both you and the lessor have different goals and objectives depending on the property you seek to lease and its intended purposes. Nevertheless, common negotiable terms usually include the following:

  • The rent amount
  • The security deposit amount
  • The lease term length
  • The way in which you and the lessor will handle rent increases during the lease term
  • The property improvements for which you and the lessor are respectively responsible
  • The size, type and placement of any business signage

Common commercial lease types

In general, commercial leases come in the following five types

  1. Gross leases
  2. Net leases, also called single net leases
  3. Modified net leases, also called modified gross leases
  4. Double net leases, also called net-net leases
  5. Triple net leases

Each of these commercial lease types contains its own unique provisions, usually having to do with building repair and maintenance costs, as well as operating expenses. As with virtually all other aspects of your commercial lease, you can negotiate with the lessor as to how the two of you will split such costs.

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