Commercial Lease Agreement: Key Things to Know!
A commercial lease agreement of NJ is a document that gives the details of the obligations and responsibilities of the landlord and the tenant. Only after the agreement, the tenant can use the space for business, and the owner gets the rent. Legally Binding Document Many things go into this document and you can’t compare it to the standard lease. Once the lease is signed, the tenant has the power to install fixtures and other equipment that is required to run the business for conducting the regular business activities. There are inherent risks when a stranger uses the property for business. Landlords across the state-run credit checks. This request is placed with the office of Secretary of State. It is common with the tenant who wants long term leases. What Does It Contain? The lease outlines all the obligations. Details of the base rent, other expenses are there. It also contains the details of who is responsible for the repairs or various things. Types of Leases There are four main types: Gross – In this form of lease, the landlord takes care of expenses, and the tenant only pays a fixed rent. Net – In this tenants has to pay the property taxes, insurance costs, and the maintenance costs besides the rent. Modified Gross Lease – In it, the cost of expenses are shared between the landlord and the tenant. Percentage Lease – In it, the tenant pays a percentage of gross rent in addition to the base rent. The calculation for a rent increase is done by considering the inflation costs and based on a certain percentage. Other Key Things to Be Considered Business Requirements- The tenant will want to ensure that the leased premise meets the business needs perfectly in terms of floor-area, liabilities, and rights, costs involved. It has to be confirmed that no direct competitor will establish its business close or next to the leased premises. Other things include parking space, garages, warehouses, etc. Liability- The landlord would want their tenant to take the full liability for payment defaults. But that’s not what the tenant wants. So they can opt for a limited guarantee by limiting the lease-term or defining the financial limit. Finally, The commercial lease agreement NJ may be for a specified period fixed or periodic. In the fixed lease, the lease term is pre-determined. But in the periodic lease, there is no end-date.