Location is key when you plan to open a retail store in South Carolina. You need to consider foot traffic, vehicle access, parking, adjacent businesses and more. However, it is not a good idea to speak to the owner about a commercial lease with your heart set on a space just because it is a building of the right size on the ideal thoroughfare. There are many factors that could turn what seems like the perfect building into a nightmare.
As Forbes points out, a commercial lease has very few things in common with a residential lease. In fact, although residential leases are fairly standard, there are several different types of commercial leases that outline the responsibilities for expenses related to various costs of the building:
- Single net lease: You pay for the utilities and the property taxes of the building and the landlord takes care of the expenses for insurance and the maintenance and repairs.
- Double net lease: You pay for the utilities, and you also take care of the insurance premiums and property taxes. The landlord covers the maintenance and repairs.
- Triple net lease: You pay all the building expenses except any structural repairs.
- Modified net lease: You and the landlord split the structural repairs and operating expenses, and it is figured as a base rent that does not change with the fluctuations of these costs.
There is considerable room for negotiation with a modified net lease (also known as a full-service gross lease or modified gross lease), and this is also the most common type of commercial lease. Watch out for hidden expenses and details such as differences between actual square footage and useable square footage.
This general overview of commercial leases is provided for educational purposes only and should not be interpreted as legal advice.