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What are some common terms used in commercial lease contracts?

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Quick Answer

Some common terms in commercial lease contracts refer to the type of lease, such as "full-serviced," "gross," "net," "double net" or "triple net," notes About.com. Other common terms include "common area maintenance," which describes who is responsible for the cost of maintaining common areas of buildings outside of offices, and "build-out," which describes improvements made by owners on behalf of tenants.

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Full Answer

A fully serviced lease is one in which the building owner includes the cost of things such as utilities, maintenance and lawn care in the rental payments, according to About.com. With a gross lease, the building owner also agrees to pay for common expenses such as repairs and insurance, and in some cases property taxes. Gross leases are generally the most expensive because of these add-ons. A net lease dictates that the person leasing the space pays the costs of the square footage, in addition to common area maintenance, utilities, repairs, insurance and property taxes.

A double net lease is one in which the person leasing the space pays for taxes and insurance, while the owner of the space pays for maintenance, states About.com. People holding triple net leases pay for taxes, insurance and maintenance costs. A commercial real estate contract may also lay out the terms for subleasing, in which someone else may take over all or part of the space from the original lessee.

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