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Lease Terms

What follows is a short overview of typical lease clauses you will encounter as you review your first lease document.  This list is not intended to replace your need for a qualified Real Estate Attorney but to help you understand the terminology of the lease.

If you encounter specific provisions that you would like retailcriteria.com to define or explain, please email your request and we will add it to our running list of lease terms.

TERMS

DEFINITIONS

ADA Requirements
(Americans with Disability
Act)

Businesses are required to ensure their location is accessible to disabled persons.  Expenses incurred to comply with the ADA are frequently borne by the Tenant unless negotiated.

Alterations

Changes made within your leased premises.

As-Is

Describes how the Tenant’s space will be turned over after the lease is executed. 

Assignment

Circumstances that would allow you to lease or not to lease your space to another Tenant.

Attorney Fees

Agreement as to who pays the Attorney's fees if a disagreement ends in court.

Attornment

To agree to be tenant to a new owner or Landlord of the same property.

Breakpoint

Dollar figure used to reflect when additional rent will be paid to Landlord.

CAM (Common Area
Maintenance)

Expenses incurred by the Landlord to maintain the buildings common areas, including but not limited to, lobbies, hallways, parking lots, lighting expenses and requirements, security, advertising, etc

Condemnation

Government entity of a building to stop any type of business or occupancy to be allowed to take place.

CPI (Consumer Price Index)

An index used to escalate rent or prorata charges to keep up with inflation.  A negotiated clause with CPI is sometimes used and sometimes negotiated out of the lease form.

Cotenancy

Tenants rights  when a specified anchor or tenant vacates the shopping center property.

Defaults

Circumstances when Tenant or Landlord does not fulfill the respective responsibility per lease.

Demised Premises

Area being leased. Typically measured as follows: Outside of front wall to outside of back wall equals the depth of space number.  Middle of the left wall to middle of the right wall equals width number.  Multiply these two numbers together for total square footage.  Interior measurements do not reflect the demised premises.  If free-standing or “end cap” (end tenant in a row of tenants) width of space will include the entire width of outside wall thickness.

Deposit

Up-front money required by Landlord.

End Cap

End tenant in a row of tenants.

End of Term

The date you will no longer be entitled to lease the space (unless an option is exercised).

Estoppels

Explains a tenants duty to provide a signed document that compiles with the lease terms.

Exclusive

Tenants rights to be the only tenant within a shopping center to sell a certain type of item or items.  Sometimes defined as “price points”.

Grandfather Clause

Landlord or tenant allowed to keep or maintain something that does not conform to current codes or standards. (Example: oversized sign)

Gross Lease

Tenant pays a fixed amount per square footage and Landlord operating expenses (CAM, taxes, insurance) combined.

Holdover

Remain in space after the end of term expires without negotiating or signing a lease extension.

Hours of Operations

Required hours to be opened based on day of week.

HVAC

Heating, ventilating and air conditioning.

Insurance

An insurance bill for the building the Landlord owns.  Will pass on the prorata share of this expense to Tenant according to the size of the leased space.

Lease Gross

Tenant pays a fixed amount per square footage.

Lease Net

Tenant pays a fixed amount per square footage and Landlord operating expenses (CAM, taxes, insurance) not included.

Lease Plan

Lease exhibit which shows the entire shopping center with all tenants and their respective  labeled spaces.

Lease Triple Net

CAM, Taxes, Insurance expenses explained separately.

Length of Term

Number of months or years in primary term of lease.

Lessee

Tenant.

Lessor

Landlord.

Letter of Intent

List of basic components (economic and legal) of a deal which Landlord and tenant execute to confirm their understand and agreement of initial terms.  Basis for the lease draft.

Non-disturbance

Landlord’s lender forecloses on a loan which is secured by the building housing your leased premise.

OND (Option Notification Date)

A deadline in the lease to notify the Landlord that the Tenant intends to stay in your space for the next negotiated period of time.

Options

A provision that covers your rights to extend the lease past the current end of term.  A specific date is noted as a deadline to exercise this option.  The deadline is commonly referred to a an option notification deadline.

Percentage Rent

An agreed upon sales number when reached by tenant within a specific period of time will be paid to the Landlord. An additional amount of rent based on percentage.

Premises

Leased space.  May include square footage.

Prorata Charges

Combination of taxes, insurance and CAM (Common Area Maintenance)

Pylon Sign

A sign that lists tenants of particular shopping center. Usually located at entrance to shopping center. 

Relocation Clauses

Negotiated clause based on the Landlord’s request for relocation of your business.

Remedies

Circumstances when tenant or Landlord does not fulfill the respective responsibility per lease.

Rent

Amount paying for rented space.

Rent Commencement Date

Date rent payments start for leased space.

Repairs

Changes made within your leased premises.

Security Deposit

Up-front money required by Landlord paid by Tenant.

Signage

Allowance of installation of business signs. (Size, Location, etc) May include additional fees to be paid to the Landlord.

Subletting

Circumstances that would allow you to lease or not to lease your space to another tenant

Subordination

Landlord’s lender forecloses on a loan, which is secured by the building, housing your leased premise.

Taxes

Tax bill from Landlord based on the size of space being leased.

Term

Length of time for leased space.

Triple Net Charges

Combination of taxes, insurance and CAM (Common Area Maintenance)

Turnover

Lease fully executed and the Landlord has completed his required improvements to leased space.  Then "Turnover" takes place.

Use

What is permitted to be sold or activity within leased premises.

   
 

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