You’re looking to lease a commercial property for your new business. You found a space that looks promising, and you think that you can afford the rent. But then you’re handed the lease, and it’s more complex than you expected.
It’s important not to sign anything until you fully understand exactly what you’re agreeing to. Commercial leases can include various terms, clauses and other binding agreements that can make or break your business. This is not an area where you want to make a mistake.
Is it a triple net lease?
Just one example of the complexity of a lease is whether or not it is a triple net lease. You already know that you have to pay the base rent every month. But there are three different types of leases that can add other costs. They are as follows:
- With a single net lease, you also have to pay the property taxes.
- With a double net lease, you take on the property taxes and the insurance for the property.
- With a triple net lease, you have to pay the property taxes and the property insurance and cover the costs of all of the maintenance and upkeep.
Furthermore, some business owners may offer you a lease that simply says you have to pay the rent and they will take care of everything else. But you need to understand what you’re agreeing to pay because it can have a massive impact on what your business is really responsible for, financially speaking, which could go far beyond those rent payments.
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