Commercial Lease: 12 Terms Explained (part 1)

lease agreement

If you’re currently looking for space to host your business, this article is for you.  When you lease commercial property, you need to agree to and sign a commercial lease agreement.  But commercial lease agreements are legal documents with an overwhelming amount of legal jargon and often hard to know what you’re agreeing to or signing for.  It is essential that you understand all the terms in the lease agreement.

A landlord agrees to lease their property with a series of conditions by which the tenant needs to abide.  A written contract will stipulate those terms and agreeing and signing will make the document legally binding.  You must always abide by the landlord’s terms in the lease agreement.  Before you sign the lease agreement, your solicitor may help you negotiate those terms with the landlord, so that both benefit from the leasing conditions. 

There are different types of commercial leases.  Understanding the functionality of each one of the leases you can opt for, will help you to choose the right one for you.

Here are 3 of 12 terms you will find in a commercial lease:

1 – Gross Lease

A gross lease is a type of commercial lease that allows the tenant to pay the landlord rent as a gross amount, which excludes expenses and property charges.  The rent should be exclusive of property taxes, maintenance expenses and insurance.  The tenant only pays for rent as a gross amount with no inclusions.

2 – Net Lease

Unlike a gross lease, a net lease is a type of lease that holds the tenant responsible for contributions towards payment of taxes, insurance fees and maintenance costs. As such, the tenant pays a flat rate for rent plus an extra amount to cover other costs.

3 – Percentage Lease

With a percentage lease the tenant pays for a base rent plus a percentage of the business profit.

Make An Enquiry

Call us now on 020 7113 4003 or complete our Online Enquiry and we will be delighted to talk with you about your legal matter.

Free Enquiry

Back to all news

Share Article With:

Make An Enquiry

    Global Excellance Awards

    Client Reviews

    DG Law were fantastic throughout our purchase process. We had a short, fixed, timeline to

    Venetia Lawson-Cruttenden [solicitor] is fantastic!  She is always so thorough and efficient and gives you the

    DG Law supported us through a very difficult contractual negotiation to achieve exactly the outcome

    We were very pleased with the way that DG Law helped us on our transaction

    Thanks for all the help from DG Law in pulling together our somewhat complicated loan. 

    DG Law resolved a difficult lease renewal for us and their services were excellent –

    I needed understanding and experienced legal advice. DG Law provided an excellent service at a

    My experience was second to none – the service was professional and personal. DG Law

    DG Law always step up to the plate on our transactions and handle the various

    DG Law was recommended to me and my partner and I received excellent advice –

    Having worked with DG Law a number/couple of times now, I have been really impressed

    DG Law were constantly at hand, and kept pro-active throughout the thorny process of getting

    DG Law organised and ran a very useful session to help to make our team’s

    DG Law came recommended to me and whilst setting up a new business it was

    We were recommended three lawyers to handle the sale of our seven year old successful

    Why Choose Us?

    We live by our core values of transparency, flexibility and being honourable – every day

    We put ourselves in your shoes so we understand your problems from the inside out

    We deliver our advice in a way that is easy to understand