There are many different types of commercial leases. A “triple net” lease means that the Landlord’s taxes, common area maintenance and insurance are passed through to the tenant as additional rent. In a “gross” lease the Landlord’s taxes, common area maintenance and insurance are factored into the Base rent. In a “modified gross” lease, many Landlord costs may be factored into the base rent but some items such as real estate tax increases over a base year may be passed through to the tenant. When preparing a Letter of Intent most commercial brokers will understand which type of lease is used in the Building and the Tenant should have at least a general sense for what the monthly charges will be.
*Thank you for taking the time to read this article. This article is part of our “Commercial Leasing for Non-Lawyers,” a Blog Series on Commercial Leasing. Other aspects of commercial leasing transactions in New York are discussed in other Parts of this series.
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