Key Provisions To Consider When Negotiating A Commercial Lease

It is essential that tenants carefully consider many factors when negotiating a commercial lease. This can help avoid unforeseen costs, protect existing or future business and start the tenant-landlord relationship on the right foot. Here are some key provisions that tenants should consider while negotiating a commercial lease.

Base Rent and Extra Cost

Most commercial leases used today allow landlords to add to the tenant's negotiated "base" rent, an array of their operating costs known as "additional" rent. These types of leases are known as net leases. It is important for tenants to understand how the proposed operating costs are calculated by the landlord and review the costs that fall under the tenant's responsibility. Tenants may negotiate limitations on what can be charged back as operating costs and require the landlord to provide an estimate of the current operating cost based on the space to be rented. Also, tenants should consider including an