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Lease terms you should know:
Lessor: Landlord
Lessee: Tenant
Right of First Refusal: Before vacant space is rented to someone else, landlord must offer it to the
current tenant with the same terms that will be offered to the public.
Gross Lease: Tenant pays flat monthly amount; landlord pays all operating costs, including
property taxes, insurance and utilities.
Triple Net Lease: Tenant pays base rent, taxes, insurance, repairs and maintenance.
Percentage Lease: Base rent, operating expenses, common area maintenance, plus percentage of
tenant's gross income (most common for retailers in shopping malls).
Sublet: Tenant rents all or part of space to another business; tenant is still
responsible for paying all costs to landlord.
Assign Lease: Tenant turns lease over to another business, which assumes payments and
obligations under the lease.
Anchor Tenant: Major store or supermarket that attracts customers to a shopping center.
Exclusivity Provision: Shopping center can't lease to another who provides the same product or service
that existing tenant does.
CAM: Common area maintenance charges including property taxes, security, parking lot
lighting and maintenance; may not apply to anchor tenants in retail leases.
Nondisturbance Clause: Tenant cannot be forced to move or sign a new lease if building or shopping
center is sold or undergoes foreclosure.
-Source SBA
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