Lease Agreement Glossary
- Tenant: The person or party renting the commercial property.
- Landlord: The person or party owning the commercial property and renting it to the tenant.
- Lease: The legal contract between the landlord and tenant outlining the terms of the rental agreement.
- Rent: The amount of money paid by the tenant to the landlord for the use of the commercial property.
- Security Deposit: A sum of money paid by the tenant to the landlord at the beginning of the lease to cover any damages or unpaid rent at the end of the lease.
- Term: The length of time the lease agreement is in effect.
- Renewal: The option for the tenant to extend the lease agreement for an additional term.
- Default: The failure of the tenant to fulfill their obligations under the lease agreement.
- Eviction: The legal process by which a landlord may remove a tenant from the commercial property for a breach of the lease agreement.
- Subletting: The act of a tenant renting out the commercial property to a third party without the consent of the landlord.
- Quiet Enjoyment: The right of the tenant to peacefully use and occupy the commercial property without interference from the landlord.
- Common Area Maintenance (CAM): The cost of maintaining common areas of the commercial property, shared by tenants, which is usually added to the rent.
- Operating Expenses: The expenses incurred by the landlord in operating and maintaining the commercial property.
- Exclusive use clause: A clause in the lease agreement that grants the tenant exclusive use of a specific area or feature of the commercial property.
- Alterations: Any changes or improvements made to the commercial property by the tenant, which may require landlord's consent.
- Assignment: The transfer of the tenant's rights and obligations under the lease agreement to a third party.
- Subordination: A clause in the lease agreement that allows the tenant's lease to be subordinate to any future financing or mortgages taken by the landlord on the property.
- Indemnification: A clause in the lease agreement that requires the tenant to indemnify and hold the landlord harmless from any claims or losses arising from the tenant's use of the property.
- Exclusive rights clause: A clause in the lease agreement that grants the tenant exclusive rights to operate a specific type of business within the commercial property or a designated area.
- Insurance: A clause that obligates the tenant to carry insurance to cover losses to the tenant, the landlord or third parties arising from the tenant's use of the property.
- Triple Net Rent (NNN): A type of commercial lease where the tenant is responsible for paying a portion or all of the operating expenses in addition to the base rent.
- Gross Rent: A type of commercial lease where the landlord is responsible for paying all the operating expenses, in addition to the base rent.
- Force Majeure: A clause in the lease agreement which excuses non-performance of the contract by either party due to an unexpected event or circumstance that is beyond their control such as natural disaster, war, pandemics, strikes, etc.
- Gross Lettable Area (GLA): The total floor area of a commercial property that can be leased to tenants, including common areas such as lobbies, restrooms, elevators, and corridors.
- Guarantors: A person or party who guarantees the performance of the tenant's obligations under the lease agreement, usually a parent or relative of the tenant, or a company that the tenant is affiliated with.
17 Jan 2023
Author Loy de Jager