Common Types Of Commercial Leases And Lease Terms

When doing business, entrepreneurs often encounter various types of commercial leases and lease terms, each with its own set of conditions and implications for their operations.

The legal team at Fuller Sloan LLC leverages our vast experience to provide knowledgeable and actionable legal guidance to clients in Johns Creek and the Atlanta metropolitan area. Driven by a commitment to professionally handling all your business’ legal issues, we take time to understand the specific needs and goals of your business, making sure that our legal strategies are aimed at addressing your unique challenges and opportunities.

What Are The Common Commercial Leases?

There are various types of commercial leases, with the most common ones including the following:

• Cost-of-living leases: Rent rises with the cost of living or inflation.
• Net leases: Tenant pays base rent plus additional costs like taxes or insurance.
• Flat or fixed leases: A set rent amount for a fixed period. Uncommon in commercial real estate.
• Gross leases: Tenant pays base rent; landlord covers all operating costs.
• Step leases: Rent increases by a set amount each year.
• Percentage leases: Tenant pays base rent plus a percentage of their gross income.
• Modified gross leases: Tenant pays base rent plus some operating expenses.

A Fuller Sloan LLC lawyer can help you determine the best lease type for your business and negotiate favorable terms on your behalf.

What Are Common Lease Terms?

Lease terms outline the responsibilities of each party to the lease. Common terms include:

• Lease duration: The length of time the lease agreement is in effect.
• Rent amount: The monthly or annual payment the tenant must make.
• Payment schedule: The timing and frequency of rent payments.
• Maintenance obligations: Responsibilities for upkeep and repairs of the property.
• Renewal options: Terms under which the lease can be extended or renewed.
• Termination conditions: Conditions under which the lease can be ended early.
• Security deposit: The amount paid upfront to cover potential damages or unpaid rent.
• Use of premises: Restrictions or permissions regarding how the property can be used.

Understanding these terms may require legal guidance from an experienced Fuller Sloan LLC attorney to better ensure that your lease agreement is clear, fair and aligned with your business needs.

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