It's not uncommon for businesses to rent the space out of which they operate. These leases are considerably more complicated than standard residential leases, though. As such, if you’re starting a company that will eventually need to rent commercial property, it’s wise to familiarize yourself with the different kinds of arrangements under contract law. 

3 Kinds of Commercial Leases 

1. Gross Lease

Also called full-service leases, gross leases are the simplest arrangement for both tenants and landlords. The owner covers all relevant property-related expenses, and the renter makes a lump sum payment that includes both rent and incidentals every month.

In such an arrangement, the landlord is generally responsible for property taxes, applicable insurance premiums, and maintenance costs. If the tenant is still responsible for utilities, though, it’s known as a modified gross lease.  

2. Percentage Lease

Tenants with a percentage lease must pay a base rate for rent every month in addition to a portion of the gross sales they earn from doing business in the space. This arrangement is especially appealing to retail store owners because their rent coincides with their revenue. The base rate is considerably less than what they would pay if they had a gross lease, which can be a godsend during the slower months. 

3. Net Lease

In net lease arrangements, tenants pay a base rent plus one or more additional property-related expenses. For example, in a single-net lease, the tenant is responsible for their pro-rated share of property taxes.

In a double-net lease, on the other hand, renters cover both taxes and property insurance premiums. This is the most popular net lease under contract law. A third arrangement, known as a triple-net lease, is also possible. In this scenario, the tenant covers taxes, insurance, and common area maintenance costs. 

Because commercial leases are inherently complex, it’s wise to consult a contract law attorney before signing one. The knowledgeable team at Schaller Campbell & Untied Attorneys can evaluate the terms that you're considering to ensure they’re in your company’s best interests. Located in Newark, OH, this firm was founded in 1914 and has established a history of excellence in the decades since. Their seasoned lawyers are equipped to navigate all kinds of legal proceedings, from real estate transactions to divorce filings. To request an appointment with a contract law attorney on their team, reach out online or call (740) 349-8505.