Part 9*: What do the terms “base rent” and “additional rent” mean in a commercial lease?

In some lease agreements, the Tenant agrees to pay base rent plus additional rent. Additional rent may include taxes, insurance, common area maintenance and utilities. Each building is different, and the brokers typically negotiate these business terms and memorialize them in the Letter of Intent.

It is important to note that some additional rent items such as taxes can increase (or decrease) over time. In the lease agreement, the Tenant may have the right to request supporting documentation to verify that the additional rent is correct. Some Landlords will also spread the estimated amount of the additional rent into monthly payments and the “true up” the payments at the end of the year. This method is often preferable to Tenants for budgeting and cash flow purposes.

*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.

For questions about residential real estate law, or general information about our firm, please contact us at (914) 338-8050 or send an e-mail to We look forward to hearing from you.

Betensky Law PLLC
118 N. Bedford Road, Suite 302
Mount Kisco, New York 10549
(914) 338-8050

This is ATTORNEY ADVERTISING. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of an attorney/client relationship. Prior results do not guarantee a similar outcome.

Leave a Reply

Your email address will not be published. Required fields are marked *

Contact Us

Give us a call or fill in the form below and we will contact you. We endeavor to answer all inquiries within 24 hours on business days.