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Differences between the different types of commercial leases

Due to high prices and low inventory, finding the right location for a Georgia business can be a complex and costly endeavor. As a business owner, you understand the importance of finding the right location from which you can operate or open a storefront, and it can be tempting to move forward as quickly as possible when you find the ideal place. Before you proceed, it may be helpful to first understand the different types of commercial leases. 

There are different types of commercial leases, and each will require different things of both parties involved in the agreement. Knowing exactly what is in your lease will help you avoid problems and ensure that you are agreeing to terms that make the most sense for your company. In some cases, it may be possible to negotiate the terms of your commercial lease to better suit the details of your individual situation. 

Commercial lease options 

The specific type of commercial lease available to you depends on your landlord, the type of property you are leasing and other factors. Some of the most common types of commercial leases include the following: 

  • Full-service or gross lease — With this lease, the tenant will pay base rent. The landlord is responsible for other costs, such as building expenses, insurance maintenance fees and more. 
  • Net lease — With this type of lease, the tenant will pay rent, as well as a share of the building’s operational expenses, property taxes, insurance, maintenance costs and more. 
  • Percentage lease — This type of lease requires the tenant to pay rent, as well as a percentage of profits to the landlord. This is a common arrangement for tenants in a commercial building with multiple stores, such as a mall. 

It is critical to understand the terms to which you are agreeing before you move forward. Failure to do your due diligence or be aware of your financial responsibilities could result in a dispute that could cost your business time and money.  

Terms that protect your business 

As a business owner, you will want to take every possible step to ensure that you are protecting the long-term interests of your business when reviewing a commercial lease or negotiating terms. Knowing what’s in your lease and understanding how it could impact your operations is a critical step in avoiding legal issues and disputes that could arise.