Mt. Laurel, New Jersey, offers a wide variety of attractions. Residents can enjoy time at the Funplex with family or the beautiful scenery at Laurel Acres Park. The area's attractions make it the perfect place to rent out commercial buildings.
World Population Review reports that Mt. Laurel's population is growing by over a percent yearly and increased by nearly 5% since 2020. Now is an ideal time to purchase income commercial properties given the area's constant growth.
Ready to dive into commercial lease agreements? Let's explore the key business lease terms and lease negotiation tips in this property leasing guide.
1. Commercial Lease Types
Several commercial lease options exist for landlords, with a common one being the gross lease. The renter pays a set rent. You are responsible for anticipating and paying the majority of the property's costs, including the following:
- Taxes
- Insurance
- Upkeep
Another lease option is the net lease. The renter covers all or part of the property's costs in addition to the base rent.
Define each party's obligations in the leasing agreement clearly to avoid misunderstandings and disagreements with the net lease. Variations of commercial property costs that the renter may cover include the following:
- Triple net (maintenance, commercial property taxes, insurance)
- Double net (insurance and commercial property taxes)
- Single net (commercial property taxes)
You may also choose the adjusted gross lease scenario. The adjusted gross lease is a combination of net and gross leases, where some property costs are split between the two parties. Negotiate conditions that balance benefits and risk because you can customize the lease to meet the interests of both parties.
2. Important Lease Provisions
Important clauses to include in your commercial lease include a rent structure. Describe when and how rent will rise with escalation rental contract clauses (e.g., based on the consumer price index or annually). Ensure that the tenant understands and anticipates escalations.
Your lease should also highlight the lease's duration and any renewal options. These options may include a one-time lease renewal or several renewal periods. Provide the opportunity to renew to draw long-term renters and give them flexibility.
State in the lease who is in charge of what kinds of maintenance and repairs. Check the property frequently to make sure it is kept up properly, and take care of any problems immediately to prevent them from becoming more significant, costlier issues.
Another essential lease provision covers changes and improvements. Indicate what changes tenants may make and which party is responsible for paying for them. Consider providing a tenant improvement allowance to draw quality tenants.
How We Can Help Landlords
Several types of commercial lease agreements exist, including the gross lease and the net lease. Another option for landlords is the adjusted gross lease.
Significant provisions to include in your commercial lease are clauses about the rent structure and the lease's length. The lease should also outline who will make repairs and whether tenants can improve the property.
At PMI Garden State, we have 20-plus years of experience helping landlords negotiate details while upholding commercial tenant rights. We also use cutting-edge technology to help them stay informed of their investments. Grow your portfolio and profits by collaborating with us today.
