Understanding different commercial real estate types

On Behalf of | Jun 10, 2020 | Real Estate |

In Mississippi and around the country, commercial leases work best when they benefit both the landlord and the tenant. The landlord wants to earn an income as well as protect their investment in the rental transaction. The tenant wants a property that complements their business and meets their customers’ needs. Fortunately, there are types of commercial leases that fit the different needs of both businesses and landlords to ensure a happy rental relationship for years to come.

In real estate law, several types of commercial leases are complex in nature, but they are easy to understand and implement. The gross lease is one of those. This commercial real estate lease requires the landlord to handle most of the overall operational expenses of the property. The tenant pays one monthly fee for rent and another for common area maintenance. The landlord is responsible for paying utilities and maintenance.

The triple net lease is a favorite among landlords but not so much for tenants because the renter is saddled with many of the costs of the property. This type of lease requires the tenant to be responsible for rent, taxes and insurance, and maintenance. This is often a tough lease to get a tenant to agree to, especially in older buildings where maintenance costs could be high.

The modified net lease could be a good option for new businesses that need a break in costs in the beginning stages of their company. It requires tenants to pay rent the first year and then adds a percentage of operational expenses every following year.

An amiable tenant-landlord relationship is what most businesses want. However, problems might occur that result in legal entanglements. Real estate law, especially with commercial real estate, can be difficult to understand and may require the assistance of an experienced commercial real estate attorney. The attorney may provide guidance to expedite the legal process and protect the rights of tenants.