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Understanding the different types of commercial leases

While it sometimes it makes sense for Miami business owners to purchase the real estate where their businesses will operate, other times leasing a space is much more sensible. However, commercial leases can be quite complex and it may be helpful to understand the different types and what they offer.

The first type is known as a gross lease. According to 42 Floors, a landlord is responsible for pretty much all of the costs of maintaining the property under a gross lease. This can make things simple for a tenant, since the monthly rent will always be the same and the business owner will not have to worry about paying separate tax bills or utility bills. There is also such a thing as modified gross lease. Under this type of agreement, the tenant still pays one monthly fixed amount to the landlord. However, the tenant is responsible for its own utility bills and any janitorial expenses.

The final type of lease is called a net lease and there are three different types. Under a single net lease, the tenant pays its share of property taxes in addition to a fixed monthly rent amount. With a double net lease, the tenant pays its rent, as well as its share of both property insurance and taxes.

The most common type of net lease is a triple net lease. The tenant pays for everything it would under a double net lease, but it is also responsible for its share of common area maintenance costs. According to the Money Alert, this can actually result in savings for tenants because the amount of base rent they are required to pay is typically much lower under a triple net lease. It is also beneficial to landlords since they will not have to spend as much of their own money on maintaining the building.

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