While some Arizona entrepreneurs work out of their home, many require a larger space, perhaps to serve customers or store large equipment. Whatever the reason, a lease agreement is often required in order to secure commercial real estate for a period of time. A lease is a legally binding contract, so it’s important to understand what it includes and ensure that both parties know what is expected.
There are four main types of leases. A gross lease includes taxes, insurance, utilities and repairs. All of these elements are included in the monthly rent payment, which is the same from month to month. In a net lease, the business owner pays for these expenses on top of the rent payment and could differ from month to month.
A double net lease means that the business owner pays the rent and then gives the landlord money for property taxes and insurance. In a triple net lease, the landlord is paid for insurance, taxes, utilities and repair. The business owner pays for the rent as well.
It is common for business owners to negotiate with the landlord, especially in a slow real estate market.
Business owners may be able to negotiate on rent, maintenance, landscaping, utilities, insurance and repairs. Many landlords raise the rent on an annual basis, so it might be a good idea to ask for a grace period or at least a cap, especially for business owners who plan to stay in the same place for many years.
There are other things to ask about as well. Many landlords prefer long-term leases, so be sure to ask about the minimum term. Sometimes business owners request improvements, so who will pay for them? It’s also good to understand permitted use, since this is often dictated by zoning requirements.
Call Cook & Price, PLC today at 480-407-4440 or email us through this website.