Jun 24, 2019

7 Terms You Need to Understand Before Signing Your Commercial Real Estate Lease

By Becky Holton


7 Terms You Need to Understand Before Signing Your Commercial Real Estate Lease

Guest blog by Becky Holton. Becky is a journalist and blogger.  She is interested in education technologies and is always ready to support informative speaking.  Follow her on Twitter, @HoltonBecky1.


In every industry, there are terms commonly used by people who are familiar with those fields. In the real estate industry, there are terms normally used by real estate professionals, especially when it comes to signing of commercial real estate leases.


Without understanding real estate lease terms, you might feel like a stray goat when signing your lease”, says Juliet Drake, a real estate consultant at Best Essay Tips.


If you are in the process of signing your commercial real estate lease, you must understand some of the important jargon and terms that you will come across in the process.

Sometimes these terms may not be used the same way in different states. So it’s important to learn about them.


A good rule of thumb is to have a real estate lawyer but it would be good to get clear about the real estate terms before you sign.


In this article, you will learn seven real estate terms as shared by Brill Assignment writing services but:


Before Signing a Commercial Lease:

It would be hard to change anything after you’ve already signed your real estate lease agreement, whether it’s for an office or retail space. It’s important to know how the lease terms used will impact you.


For that reason, you need to ask yourself some questions such as:


Did You Understand the Whole Lease?

According to Bestessays.com.au, There is a huge difference between understanding the lease terms and the entire lease. To understand the whole lease, you must read it carefully, from top to bottom. Well, depending on the business, the lease might take several pages of a book but you have to make sure you have read it all and understood the content inside it.


Did You Make the Best Deal?

You must ensure you have made the best deal possible. Being given a lease for signature isn’t enough if you haven’t gotten the best deal.


Is it Possible to Assign the Lease?

Sometimes the landlord may end your lease, especially if you want to assign to someone else, for instance, when you sell your business. Confirm this with the landlord before you sign your commercial real estate lease.


Are you Allowed to Bring in a Sub-Lessee?

This works like the assignment of a lease in that you allow another business to use your lease space using your lease agreement. That means the other business that works in your lease space pays you a percentage of the money you pay for your lease. Not all landlords will allow sub-lessees so you need to confirm this as well. 


Is There an Arbitration Clause for the Lease?

A lease with an arbitration clause means that you can settle disputes using arbitration methods instead of using the court. Check to confirm that you can take part in choosing the arbitrator.


That said here are the seven terms you need to understand before signing your commercial real estate lease.


1. Lessee

The lessee, in this case, is the person looking for an office space or a building. You are the one who will be responsible to guarantee the lease. However, your business’s documents are the ones going to be used in the lease. In short, the lessee is the tenant.


2. Lessor

If the lessee is the tenant, the lessor is the one who is leasing the office space or building to you. This could be the owner of the building or a property management company tasked with the responsibility to manage the house, building or office. In short, the lessor is the landlord.


3. Common Area Maintenance (CAM)

This is an expense that you will encounter in case something happens within the leased space. For instance, clearing the compound, in case of grass cutting, removal of snow, or other incidental services. Usually, this applies when you lease places like walkways, restrooms, and hallways.


In this case, the owner of the building or the landlord will pay the people who do the snow removal or grass cutting and then will pass the cost to the tenants in the lease. A “Common Area Maintenance (CAM) is both advantageous and disadvantageous to the tenants because landlords may charge more than they are charged for the services”, argues Jolly Wolfs, a real estate lawyer who works with Rush My Essay, one of the best college essay writing service providers in the world.


4. Sublease

A sub-lease is when you (the tenant) or the landlord come to an agreement that you can allow someone else to use the office or building you leased under your terms. For instance, when you sell the business to someone or when you share the space and the rent with another business. This happens in big towns where the rent is costly so some businesses may want to share the space and rent to reduce expenses.



5. Net Lease

This is a lease that includes various costs including Common Area Maintenance (CAM), repairs, insurance, and taxes.


6. Double Net Lease

This is a lease where the insurance and taxes are added to your lease payment. The landlord (lessor) pays the maintenance costs.


7. Triple Net Lease 

Unlike the double net lease where you foot the taxes and insurance costs and the lessor pays the maintenance costs, with the triple net lease, all these costs are added to your monthly payment.


NOTE: These are just a few of the commonly used you can learn many of them in most dissertation writing services out there.


While you will have to use a real estate lawyer to review your lease agreement before you sign your commercial lease, it is important to know these terms so that you are not left out in the negotiation process.


If you are not sure how to put it all into your plan, we recommend you to consult with paper writing service and dissertation writing service.


Here are a few other articles you might enjoy:

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Topics: commercial real estate lease

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Becky Holton

Becky Holton is a journalist and a blogger at Best Essay, essay writing services. She is interested in education technologies, college-paper.org reviews and is always ready to support informative speaking at EssayWritingLab. Follow her on Twitter.