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Understanding an Office Lease

Know the Fundamentals of a Commercial Office Lease.

If you are shopping around for an office space, chances are you are serious about signing a lease. Whether you are a seasoned veteran and you have signed multiple commercial leases or this is your first office lease, it’s good to have a fundamental understanding of commercial office leases. Below you’ll find a few of the basics of an office lease that might concern you when negotiating. Addressing them early on will ensure you are left with no surprises when you sign.

Type of Lease

Knowing what type of lease you are signing is essential to renting an office space. Because there are various types of office leases, knowing which type you are dealing with will be helpful when budgeting. Below are a few types of leases you’ll come across when office hunting.

  1.  Full Service Lease – This type of lease is all-inclusive for you as the lessee. The landlord pays for all expenses including the taxes, insurance, utilities, and maintenance costs. This lease is easy to manage as the lessor because you’ll know exactly what you’ll pay each month.
  2. Triple Net Lease – This lease type is the most common and leaves the lesser to pay for the base rent, plus all of the property taxes, insurance, and maintenance costs. It requires more involvement and greater responsibility.

Business Restrictions

Commercial lease may restrict what type of business you can have at a certain location. Landlords or city ordinances may restrict the commercial property you want to lease to certain businesses. It’s important to know from the beginning if you can use the property for your type of business. Restrictions you may find include restrictions for restaurants, retail, and medical facilities.

Common Areas

For spaces you may be sharing with other tenants, you’ll want to find out what the commercial lease states about common area maintenance requirements. Knowing how much you’ll be charged for the upkeep of public spaces and what percentage you are responsible for when damages occur will help you to avoid any unforeseen costs.


The commercial lease will state who is responsible for maintenance. Once again, you’ll want to know what costs you are responsible for when repairs or improvements are needed. Will you be responsible for paying when the air conditioning unit fails? Also, do you want to be responsible for repairs or improvements so you know it will be completed in a timely manner? Negotiating the maintenance details in the commercial lease will improve your renting experience.


As a business, it’s important to label your company to clients and potential clients as part of your advertising. Although it may not seem like a big deal, being able to put a sign outside the building with your name on it is important to your business. Make sure you discuss this part of the commercial lease so you know about any restrictions on signage.

Commercial property leases are complex bindings between the lessor and lessee that will determine how positive of an experience you have while renting a space. Knowing some of the fundamentals of the lease will help you improve your office search and help you to know what you’ll want to negotiate for when you are ready to sign. Be sure to get a real estate lawyer for protection and full understanding of commercial leases. Always remember that commercial leases can be negotiated.