You started your business in your basement or garage, and it has really taken off. It’s time to get your first commercial lease so that you have space to grow.
It won’t take long, however, to realize that commercial leases are a lot more complicated than residential leases. Understanding the difference between how different types of net leases work is crucial – before you lock yourself into something disadvantageous.
What’s a single net lease?
“N” leases are the easiest for many people to understand. Quite often, it’s the most advantageous to the renter.
As a tenant, you would pay rent, property taxes and your own utilities, while the landlord is responsible for the insurance on the building (not your business) and maintenance and repairs.
What’s a double net lease?
“NN” leases shift the burden of paying building insurance to the tenant, although the landlord still remains responsible for the building’s upkeep and repairs.
These are particularly popular, and tenants often get a break in their rent because of the added insurance costs.
What’s a triple net lease?
“NNN” leases are common in multi-tenant properties, like high-rise office buildings. Tenants pay rent, their own utilities and a pro-rated share of the property taxes, building insurance and maintenance fees related to common areas.
These are also very common kinds of commercial leases. Landlords are typically only responsible for basic maintenance and repairs to the building.
It’s always wisest to have experienced legal guidance when you’re reviewing a commercial lease. Virtually everything is negotiable, so don’t assume that you have to simply “take it or leave it” when you’re handed the paperwork to sign. Find out more today about your legal options.