Residential leases in Florida and around the country are usually pretty straightforward. The tenant pays their rent and utility bills, and the landlord is responsible for property taxes, insurance and maintenance. Things are a little more complicated when commercial real estate is involved. Commercial tenants usually sign what are known as single, double or triple-net leases, which require them to pay costs that would normally be the landlord’s responsibility in the residential market.
Single and double-net leases
Single-net leases require commercial real estate tenants to pay only property taxes in addition to the agreed upon rent. These leases are quite rare. Double-net leases that require commercial tenants to pay insurance costs as well as property taxes are far more common. The property taxes and insurance payments required by single and double-net leases are usually included in the rent. These are bills that must be paid on time, so landlords prefer not to take any chances.
Triple-net leases
When commercial tenants sign triple-net leases, they are responsible for repairs and maintenance as well as insurance and property taxes. Landlords like triple-net leases because they reduce risk, and tenants are willing to sign them because accepting more responsibility usually lowers the rent. When an older building is being rented and maintenance and repair costs are likely to be high, landlords may ask their tenants to sign bondable net leases. This is a kind of triple-net lease that cannot be terminated early.
Rights and responsibilities
Commercial real estate leases are more complicated than residential rental agreements, and tenants are usually required to pay costs like insurance, property taxes, maintenance and repairs as well as their rent. When tenants sign leases that require them to pay property taxes and insurance, landlords usually include these amounts in the monthly rent so they can be sure payments will be made in a timely manner. If you are thinking about signing a commercial real estate lease, you should read it carefully first to make sure that you understand your rights and responsibilities.
