Commercial leases are required to be signed when you are going to rent commercial real estate. One of the ways to lease is by way of a triple net lease agreement. In this lease, agreement tenant is responsible for various operating costs on the property. The most common expenses come from real-estate taxes, insurance and common area maintenance costs.
Each triple net lease is different, and each lease depends on the property and the landlord. The contract may have clauses which outline the terms and specific clauses. While you can create a free Georgia commercial lease agreement online, these things should be given special attention.
The triple net lease agreement gives the details of the tax responsibilities. The property taxes are passed to the tenant on an annual basis. Each deal has a unique contract, so it is mandatory to check the tax obligations on the property thoroughly. It is done to ensure that you aren’t responsible for paying taxes or fines that you were not accounting for.
Another aspect of the triple net lease is ongoing maintenance and upkeep expenses. While the tenants will cover most of the operating costs, the contract will give the details of how the upkeep costs will be divided between the tenant and the landlord.
For instance, in a lease arrangement, the tenant pays for the general upkeep, repairs, and maintenance costs. However, the landlord is responsible for full or part of the expenses that relate to the structural maintenance of the building, e.g. roof and frame.
The property owner in the triple net tenant gets the income from the monthly rent payment. The rent payment must be negotiated to an amount which can survive the changes in the rentals during the lease period. The lease will settle for fixed monthly rent payment throughout the contract. It means the landlord can find out how much income will be generated throughout the contract after paying for the expenses. In some case, the rent increases are negotiated throughout the lease duration to compensate for the rise in the value of the property or area growth.
The cost of utilities and janitorial costs are covered by the tenant in a triple net lease. But there are some instances when these costs are shared by negotiation of the landlord and the tenant. As a landlord, you must ensure that this shared expense is not a significant amount as it would lower the monthly rent payment.
In a lease agreement, the tenant is responsible for the insurance premiums. But it varies strongly from one contract to the other. Some leases may state that the tenant will get all the required insurance policies on the property. Then there are agreements which state that the landlord and tenant, both will be responsible for a particular policy or the premium of the insurance; it depends entirely on the negotiation.
It is crucial to understand the insurance responsibilities in a triple net lease fully. It will help to decide the expenses, and you are going to have for the policies that are required to be carried out as a property owner.
Creating the Lease Agreement
There are many legal forms site where you can create and edit free Georgia commercial lease agreement. But a lot of details would be needed. When you are creating the lease agreement, you should discuss the various terms with the tenant.
It is crucial to understand the costs applicable fully. As the property owner, you will have to bear losses and the early you know about it the better.