LEASING PROPERTY: WHAT IS A LEASE

A lease can simply be defined as a written agreement drafted by the lessor which contains terms and conditions under which a lessee is to agree to abide by when leasing out a property. This agreement usually contains a specific amount of time that the lessee will agree to own the property while the owner of the property is assured specific payment during the entire duration the property is leased out. 

Both parties are bound by the terms and agreement of the contract, and in cases where either party fails to meet contractual obligations, there are consequences. 

TYPES OF LEASES

Leases differ a lot when it pertains to properties. The structure of a lease is decided by the lessor. Current real estate market trends can also influence the structure of the lease. Depending on how a lease if formed, there can be a burden on the renter or the property owner, if it’s not designed to satisfy certain requirements from either party.

Below are some common types of leases;

1. Absolute Net Lease: This form of lease requires a tenant to take on a lot of roles. Some of these roles include, paying for taxes, paying for insurance and also taking care of the cost of maintenance of the property. This form of leasing a property is usually found in the single tenants system. Single tenants system, simply means that, the owner of the property builds housing to cater for the needs of the tenant. The owner then makes the renter, have the property for a duration of time agreed upon.
2.  Triple net lease. This form of lease comes with three levels of expense associated with it. These include, insurance, property maintenance, as well as real property taxes. Triple net lease can also be referred to as pass-through or expense because, the property owner entrust the entire management and responsibilities associated to the property unto the renter as rent excess. 

A Triple net lease can also be called NNN. They are suitable for single as well as multi-tenant leasing agreements. The tenant is solely responsible for maintaining both the landscape of the property as well as the interior maintenance. The tenant therefore decides what the property should look as long as the tenancy holds. 

 

However, in the case of a multi-tenant agreement, the property owner has complete control over the appearance of the entire property. This way, no tenant can destroy the overall appearance of the property. 

        3. Modified Gross Lease. This  form of a lease transfers the entire burden accosted with the rental property to the owner. Based on the terms and agreement of the lease, the property owner is responsible for paying for the building insurance, paying taxes and also maintain cost of the property.

4.Full Service Lease. Full Service List usually includes taking care of most of the cost of operating a business. Theres certain limitations to this such as phone and internet bills. This type of lease is usually in the best interest of the tenant since it means there are no extra charges above the monthly rate. However, the renter usually charges a premium price for the extra cost they might incur.

COMMERCIAL LEASE AGREEMENTS

A commercial real estate lawyer specialise in drafting and negotiating on your behalf to meet the needs of the tenant as well as the landlord for that particular transaction. Commercial real estate lawyers can be found in every city in Canada. Cities like Ajax have a long list of real estate lawyers that can assist in preparing lease agreements. 

A real estate lawyer in Ajax, usually drafts and negotiate commercial lease agreements on behalf of the renter to protect their interest during the entire process of the deal. Examples of specific areas real estate lawyers specialise in are; negotiating lease terms on behalf of the tenant of landlord, clarifying maintain ace and repair obligations to the renter and landlord and also terminating the lease if the tenant dose not provide the required qualifications for leasing a property.