South Carolina Real Estate Agreement | Charleston Commercial Real Estate AgreementCommercial Lease Agreement Basics

Commercial lease agreements are an essential component to commercial  real estate. Commercial lease agreements are sometimes one of the most expensive and influential business decisions for an owner to make. The terms and polices of a commercial lease agreement can even make the difference between success and failure for new small businesses. Unlike a residential lease agreement, a commercial lease agreement are long-term binding documents with less negotiability. A commercial lease agreement also is not based on any standard form and instead requires careful examination in each case.

A business should always try to consider what sort of needs they wish to protect before entering into a commercial lease agreement. The most constrictive needs usually include the cost of rent and the length of the lease. A lease budget can help businesses gain an understanding of appropriate rent offers, while the length of a lease usually depends on a business owner’s comfort with business operations and confidence in business success. For a business dependent upon walk-in customers, it is important for that owner to guarantee outside signposting in their lease agreement in order to draw in outside customers. A business with a niche service, such as a craft shop, may also want to ensure that the lease agreement prevents the  landlord from leasing out space to competing craft shops.

Types of Leases

While leases do not follow any standard form and are usually customized to the needs of the landlord, most leases fall into one of four categories:

  • A single-net lease agreement makes the tenant responsible for property taxes
  • A doubt-net lease agreement makes the tenant responsible for property taxes and insurance
  • A triple-net lease agreement makes the tenant responsible for property taxes, insurance and maitenance
  • A gross lease agreement makes the tenant only responsible for rent, while the landlord is responsible for property taxes, insurance, and maintenance