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What costs can a landlord add to a commercial space’s base rent?

On Behalf of | Sep 28, 2023 | Commercial Real Estate |

Renting a commercial space is essential to starting a business, especially if your operations involve receiving clients for your products or services. As a business owner, examining the commercial lease thoroughly to understand the rent costs is vital. Your agreement should explain these details, including the breakdown of rent and additional fees.

All tenants should know the difference between base rent and additional rent often charged by landlords. Base rent is the minimum amount you owe the landlord for occupying their property, usually calculated using the space size. Sometimes, the landlord could charge you for communal areas usable for your business.

The landlord may also charge you for additional expenses tied to the property. The value of these costs may increase over time, so landlords might have you shoulder a portion of them. The landlord could collect one or more of the following fees:

  • Operating costs
  • Part of real estate taxes
  • Annual increase in base rent
  • Base rent increase based on other factors, such as additional wages of property staff

It is crucial to ask the landlord about these costs, especially if excluded from the lease agreement. Knowing these details can also affect how you transact and negotiate with the landlord, considering other terms that might seem too unfavorable.

Seeking professional help

Choosing a suitable commercial space can make or break a business. You could consider speaking to a legal professional before signing the lease, especially if you feel the terms may put your business at risk in the future. By doing so, you can get help with negotiations and obtain a better deal than you initially had.