What are the Different Types of Commercial Leases?

Hi there. I can tell you the different types of commercial leases here. There are three main types of commercial leases in India, which are gross lease, net lease and modified gross lease.

What are the Commercial Property Lease Types?

1. Gross Lease: This is also called a full-service lease. In this, the landlord pays all the property's expenses from the rent they receive. The costs include maintenance, taxes, and insurance. The landlord is responsible for the building and the tenant has to focus on just business. This lease type is mainly used for buildings with multiple tenants.

2. Modified Gross Lease: This is quite close to what I shared above apart from some aspects. There is a chance of compromise between the landlord and the tenant even though the rent is requested in the form of a lump sum by the landlord. Both parties negotiate on the expenses which can be added to the base rental rate. This is a famous choice when it comes to the side of tenants. Here, you won’t find costs like electricity, etc.

3. Net Lease: This is a lease where the tenant pays for all or a certain portion of the usual expense in addition to the space occupied by them.  The expenses are linked with the maintenance and operational costs of the property. The items consist of taxes, insurance, etc.

This is all from my end. I hope you are now aware of the commercial real estate lease types.