Renting commercial properties has become more and more common. Before you lease real estate, however, you should understand the contract that landlords and tenants typically sign. What To Know About Real Estate Leases Types There are several different kinds of commercial leases. With a gross lease, the landlord or lessor typically pays all the related expenses, such as insurance and taxes. If those costs increase, the landlord may raise the tenants’ rent to cover the difference. However, most commercial leases are net leases. That means the tenants are responsible for the taxes and insurance. The tenants can deduct some of these expenses on their tax returns. Percentage leases are also common in the commercial industry. Used for shopping centers and other retail locations, percentage leases vary based on the amount of sales a given store earns. The higher the sales, the higher the tenant’s rent. Terminations and Evictions Ideally, the lessor and the lessee will honor the full contract. However, that is not always the case. Sometimes, the parties will agree to mutually terminate the lease. If there is a breach of the agreement or a destruction of the property, the landlord can also evict the tenant. How To Lease Real Estate Since commercial contracts can be complex, you should have a second pair of eyes read over any agreement before you sign it. You should also contact an experienced broker or advisor who can help you lease real estate.
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AuthorHello, my name is Roger Dennison and I'm a successful commercial real estate broker, with more than 20 years in the field. Archives
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