Commercial Building Lease

Summary. There are different types of leases, but the most common types are absolute net lease, triple net lease, modified gross lease, and full-service lease. Tenants and proprietors need to understand them fully before signing a lease agreement.

If the commercial tenant is a shell corporation and/or does not have any assets of value, the commercial tenant may choose to walk away from its commercial lease obligations.Often the landlord will require guarantees in order to prevent a commercial tenant from walking away from its lease obligations.

What happens to your tenancy? Nothing will happen to your tenancy during the contractual term. Your landlord's interest will be sold subject to any existing leases, which means that the buyer will inherit you as a tenant and become your new landlord.

Your lease remains valid in case a rental property is sold, and your former landlord is obliged to provide you with a name and address of a new landlord.This means that tenants cannot be forced to leave or asked to pay a different rent until the current lease expires.

A Triple Net Lease (NNN Lease) is the most common type of lease in commercial buildings. In a NNN lease, the rent does not include operating expenses. Operating expenses include utilities, maintenance, property taxes, insurance and property management.

The process for retailers qualifying for a commercial lease can vary from landlord to landlord. Landlords consider several factors including tenant mix, personal credit history of the owner, company balance sheet, profit and loss statements, open credit lines, and growth projections.

Even if the landlord sells the property, the lease would survive the sale of the property and the new landlord would step in the shoes of the old landlord and take on the responsibilities and the rights of the previous landlord without having to sign a new lease with the current tenant.

When a commercial office property is sold, the new owner has an expectation of returns on the property.You don't need to sign a new lease with the new owner, although the new owner may offer short term rent reductions or other concessions for tenants who extend their lease term or expand their square footage.