How To Negotiate A Lease

Learn The Lingo

Lease terms you should know:

  • Lessor: landlord
  • Lessee: tenant
  • Right of first refusal: before vacant space is rented to someone else, landlord must offer it to the current tenant with the same terms that will be offered to the public
  • Gross lease: tenant pays flat monthly amount; landlord pays all operating costs, including property taxes, insurance and utilities
  • Triple net lease: tenant pays base rent, taxes, insurance, repairs and maintenance
  • Percentage lease: base rent, operating expenses, common area maintenance, plus a percentage of tenant's gross income (most common for retailers in shopping malls)
  • Sublet: tenant rents all or part of space to another business; tenant is still responsible for paying all costs to landlord
  • Assign lease: tenant turns lease over to another business, which assumes payments and obligations under the lease
  • Anchor tenant: major store or supermarket that attracts customers to a shopping center
  • Exclusivity provision: shopping center can't lease to another tenant who provides the same product or service that existing tenant does
  • CAM: common area maintenance charges, including property taxes, security, parking lot lighting and maintenance; may not apply to anchor tenants in retail leases
  • Nondisturbance clause: tenant cannot be forced to move or sign a new lease if building or shopping center is sold or undergoes foreclosure

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