Abatement
Free or reduced rent for a fixed period of time, generally in circumstances where the space is damaged and unable to be occupied.
As-Is Condition
The acceptance by the tenant of the existing condition of the premises including any defects.
Assignment
An assignment is a transfer of primary rights and liabilities under the lease to another party for the remainder of the leased term. Although primary responsibility is transferred, the assignor is not relieved from liability until the end of the leased term.
Attorn
A tenant’s agreement to recognize a new owner (including a foreclosing lender) as the new landlord and pay rent and otherwise perform under the existing lease.
Base Rent
A set amount used as a minimum rent in a lease, possibly with provisions for increasing the rent over the term of the lease.
Building Code
The various laws set forth by the ruling municipality that dictate the criteria for design, materials and type of improvements allowed.
Build-Out
The space improvements put in place per the tenant's specifications. This cost may be built into the lease rate, provided for by a build-out allowance, or paid by tenant directly to the contractor or Landlord.
Build-To-Suit
An approach taken to lease space by a property owner where a new building is designed and constructed per the tenant’s specifications.
Certificate of Occupancy
A document presented by a local government agency or building department certifying that a building and/or the leased premises (tenant's space), has been satisfactorily inspected and is in a condition suitable for occupancy. This is most commonly received after construction, however some local governments want a safety inspection prior to any new tenant opening for business. New tenants should make sure they are aware of local government requirements.
Common Area Maintenance (CAM) Expenses
These are expenses incurred in operating and maintaining the common areas of the property, including exterior portions of the buildings, parking lots and driveways. Examples of CAM expenses are snowplowing, exterior lighting and parking lot maintenance.
Condemnation
The process where a governmental agency takes private property for public use, without the consent of the owner. This is done through the power of eminent domain.
Construction Management
The actual construction process is overseen by a qualified construction manager who ensures that the various stages of the construction process are completed in a timely and seamless fashion, from getting the construction permit to completion of the construction to the final walk-through of the completed leased premises with the tenant.
Default
The general failure to perform a legal or contractual duty under a commercial lease, such as not paying rent when due, or the breach of other lease requirements.
Demising Walls
The partition wall that separates one tenant’s space from another or from the building’s common areas.
Design/Build
A construction process in which a single entity is responsible for both the design and construction of a project.
Eminent Domain
A power of the state, municipalities, and private persons or corporations authorized to exercise functions of public character to acquire private property for public use by condemnation, in return for just compensation.
Estoppel Certificate
A signed statement certifying that certain statements of fact are correct as of the date of the statement and can be relied upon by a third party, including a prospective lender or purchaser. With regard to a lease, this is generally a statement by a tenant advising that the lease is still in effect, and giving information concerning rent payments and known defaults.
First Refusal Right or Right Of First Refusal
A lease clause giving a tenant the first opportunity to buy or lease a property at the same price/terms/conditions as the owner is willing to accept from another party. This often pertains to leasing adjacent space.
Force Majeure
A force that cannot be controlled by the parties, and prevents them from complying with the provisions of the contract. This includes acts of God such as a flood or a hurricane or, acts of man such as a strike, fire or war.
Future Proposed Space
Space in a proposed commercial development which is not yet under construction or where no construction start date has been set. Future Proposed projects include all those projects waiting for a lead tenant, financing, zoning, approvals or any other event necessary to begin construction. Also may refer to the future phases of a multi-phase project not yet built.
Guarantor
One who makes a guaranty or promises to pay a third party’s obligations.
Guaranty
Agreement whereby the guarantor assures satisfaction of the debt of another or to perform the obligations of another if and when the debtor fails to do so.
Holding Over, or Hold Over Tenant
A tenant retaining possession of the leased premises after the expiration of a lease.
HVAC
The acronym for “Heating, Ventilating and Air-Conditioning”.
Improvements
Generally refers to the improvements made to or inside a building.
Lease Agreement
The formal legal document entered into between a Landlord and a Tenant to reflect the terms of the negotiations between them. It contains the entire agreement between the parties and sets forth their basic legal rights.
Lease Commencement Date
The date usually constitutes the commencement of the term of the Lease for all purposes, whether or not the tenant has actually taken possession.
Leasehold Improvements
Improvements made to the leased premises by or for a tenant. Tenants are generally allowed to make interior, non-structural improvements to their space at any time, with Landlord's prior, written consent.
Legal Description
A geographical description identifying a parcel of land by government survey, metes and bounds, or lot numbers of a recorded plat including a description of any portion thereof that is subject to an easement or reservation.
Letter Of Intent
A preliminary agreement stating the proposed terms for a final contract. They can be "binding" or "non-binding".
Mixed-Use
Space within a building or project providing for more than one use (i.e., an apartment building with office space, an office building with retail space).
Normal Wear and Tear
The deterioration or loss in value caused by the tenant’s normal and reasonable use. In many leases the tenant is not responsible for “normal wear and tear”.
Operating Expenses
The actual costs associated with operating a property including maintenance, repairs, management, utilities, taxes and insurance. Invoices are generated monthly for the actual costs incurred.
Percentage Rent
Refers to a provision of the lease calling for the landlord to be paid a percentage of the tenant's gross sales as a component of rent. This is usually in addition to base rent. This type of clause is most often found in retail leases.
Pro-Rata Share / Proportionate Share
A tenant's proportionate share is the percentage their leased space occupies of the entire shopping center.
Paid On Account
In many cases, Tenant's are permitted to make a monthly contribution toward their monthly charges for operating expenses. This allows businesses to better budget their expenses and keep payments consistent even while costs may be fluctuating due to snow removal costs or tax obligations. At the end of the lease year the account will be reviewed and a credit or invoice prepared as needed. A budget amount can be determined by the lease manager.
Real Property
Land, and generally whatever is erected or affixed to the land, such as buildings, fences, and including light fixtures, plumbing and heating fixtures, or other items which would be personal property if not attached.
Renewal Option
A clause giving a tenant the right to extend the term of a lease, usually for a stated period of time and at a rent amount as provided for in the option language of the lease agreement.
Rent
Compensation, usually monthly, for the occupancy and use of any rental property, land, buildings, equipment, etc.
Rent Commencement Date
The date on which a tenant begins paying rent. This may or may not be the same date as the Lease Commencement Date.
Quiet Enjoyment
This has nothing to do with noise in and around the leased premises. It provides a warranty by Landlord that it has the legal ability to convey the possession of the premises to Tenant.
Security Deposit
A deposit of money by a tenant to a landlord to secure performance of a lease.
Special Assessment
Any special charge levied by a taxing authority against real property for public improvements (e.g., sidewalks, streets, water and sewer, etc.) that benefit the assessed property.
Subordination Agreement
As used in a lease, the tenant generally accepts the leased premises subject to any recorded mortgage or deed of trust lien and all existing recorded restrictions, and the landlord is often given the power to subordinate the tenant's interest to any first mortgage or deed of trust lien subsequently placed upon the leased premises.
Tenant Improvements
Improvements made to the leased premises by or for a tenant.
Trade Fixtures
Personal property that is attached to a structure (i.e. tenant shelving or displays) that are used in the business. Since this property is part of the business and not deemed to be part of the real estate, it is typically removable upon lease termination.
Triple Net (NNN) Rent
A lease in which the tenant pays, in addition to rent, certain costs associated with a leased property. This may include property taxes, insurance premiums, repairs, utilities, and maintenance. There are also “Net Leases" and “NN” (double net) leases, depending upon the degree to which the tenant is responsible for operating costs.
Use
The specific purpose for which a parcel of land or a building is intended to be used as specified in the lease.
Free or reduced rent for a fixed period of time, generally in circumstances where the space is damaged and unable to be occupied.
As-Is Condition
The acceptance by the tenant of the existing condition of the premises including any defects.
Assignment
An assignment is a transfer of primary rights and liabilities under the lease to another party for the remainder of the leased term. Although primary responsibility is transferred, the assignor is not relieved from liability until the end of the leased term.
Attorn
A tenant’s agreement to recognize a new owner (including a foreclosing lender) as the new landlord and pay rent and otherwise perform under the existing lease.
Base Rent
A set amount used as a minimum rent in a lease, possibly with provisions for increasing the rent over the term of the lease.
Building Code
The various laws set forth by the ruling municipality that dictate the criteria for design, materials and type of improvements allowed.
Build-Out
The space improvements put in place per the tenant's specifications. This cost may be built into the lease rate, provided for by a build-out allowance, or paid by tenant directly to the contractor or Landlord.
Build-To-Suit
An approach taken to lease space by a property owner where a new building is designed and constructed per the tenant’s specifications.
Certificate of Occupancy
A document presented by a local government agency or building department certifying that a building and/or the leased premises (tenant's space), has been satisfactorily inspected and is in a condition suitable for occupancy. This is most commonly received after construction, however some local governments want a safety inspection prior to any new tenant opening for business. New tenants should make sure they are aware of local government requirements.
Common Area Maintenance (CAM) Expenses
These are expenses incurred in operating and maintaining the common areas of the property, including exterior portions of the buildings, parking lots and driveways. Examples of CAM expenses are snowplowing, exterior lighting and parking lot maintenance.
Condemnation
The process where a governmental agency takes private property for public use, without the consent of the owner. This is done through the power of eminent domain.
Construction Management
The actual construction process is overseen by a qualified construction manager who ensures that the various stages of the construction process are completed in a timely and seamless fashion, from getting the construction permit to completion of the construction to the final walk-through of the completed leased premises with the tenant.
Default
The general failure to perform a legal or contractual duty under a commercial lease, such as not paying rent when due, or the breach of other lease requirements.
Demising Walls
The partition wall that separates one tenant’s space from another or from the building’s common areas.
Design/Build
A construction process in which a single entity is responsible for both the design and construction of a project.
Eminent Domain
A power of the state, municipalities, and private persons or corporations authorized to exercise functions of public character to acquire private property for public use by condemnation, in return for just compensation.
Estoppel Certificate
A signed statement certifying that certain statements of fact are correct as of the date of the statement and can be relied upon by a third party, including a prospective lender or purchaser. With regard to a lease, this is generally a statement by a tenant advising that the lease is still in effect, and giving information concerning rent payments and known defaults.
First Refusal Right or Right Of First Refusal
A lease clause giving a tenant the first opportunity to buy or lease a property at the same price/terms/conditions as the owner is willing to accept from another party. This often pertains to leasing adjacent space.
Force Majeure
A force that cannot be controlled by the parties, and prevents them from complying with the provisions of the contract. This includes acts of God such as a flood or a hurricane or, acts of man such as a strike, fire or war.
Future Proposed Space
Space in a proposed commercial development which is not yet under construction or where no construction start date has been set. Future Proposed projects include all those projects waiting for a lead tenant, financing, zoning, approvals or any other event necessary to begin construction. Also may refer to the future phases of a multi-phase project not yet built.
Guarantor
One who makes a guaranty or promises to pay a third party’s obligations.
Guaranty
Agreement whereby the guarantor assures satisfaction of the debt of another or to perform the obligations of another if and when the debtor fails to do so.
Holding Over, or Hold Over Tenant
A tenant retaining possession of the leased premises after the expiration of a lease.
HVAC
The acronym for “Heating, Ventilating and Air-Conditioning”.
Improvements
Generally refers to the improvements made to or inside a building.
Lease Agreement
The formal legal document entered into between a Landlord and a Tenant to reflect the terms of the negotiations between them. It contains the entire agreement between the parties and sets forth their basic legal rights.
Lease Commencement Date
The date usually constitutes the commencement of the term of the Lease for all purposes, whether or not the tenant has actually taken possession.
Leasehold Improvements
Improvements made to the leased premises by or for a tenant. Tenants are generally allowed to make interior, non-structural improvements to their space at any time, with Landlord's prior, written consent.
Legal Description
A geographical description identifying a parcel of land by government survey, metes and bounds, or lot numbers of a recorded plat including a description of any portion thereof that is subject to an easement or reservation.
Letter Of Intent
A preliminary agreement stating the proposed terms for a final contract. They can be "binding" or "non-binding".
Mixed-Use
Space within a building or project providing for more than one use (i.e., an apartment building with office space, an office building with retail space).
Normal Wear and Tear
The deterioration or loss in value caused by the tenant’s normal and reasonable use. In many leases the tenant is not responsible for “normal wear and tear”.
Operating Expenses
The actual costs associated with operating a property including maintenance, repairs, management, utilities, taxes and insurance. Invoices are generated monthly for the actual costs incurred.
Percentage Rent
Refers to a provision of the lease calling for the landlord to be paid a percentage of the tenant's gross sales as a component of rent. This is usually in addition to base rent. This type of clause is most often found in retail leases.
Pro-Rata Share / Proportionate Share
A tenant's proportionate share is the percentage their leased space occupies of the entire shopping center.
Paid On Account
In many cases, Tenant's are permitted to make a monthly contribution toward their monthly charges for operating expenses. This allows businesses to better budget their expenses and keep payments consistent even while costs may be fluctuating due to snow removal costs or tax obligations. At the end of the lease year the account will be reviewed and a credit or invoice prepared as needed. A budget amount can be determined by the lease manager.
Real Property
Land, and generally whatever is erected or affixed to the land, such as buildings, fences, and including light fixtures, plumbing and heating fixtures, or other items which would be personal property if not attached.
Renewal Option
A clause giving a tenant the right to extend the term of a lease, usually for a stated period of time and at a rent amount as provided for in the option language of the lease agreement.
Rent
Compensation, usually monthly, for the occupancy and use of any rental property, land, buildings, equipment, etc.
Rent Commencement Date
The date on which a tenant begins paying rent. This may or may not be the same date as the Lease Commencement Date.
Quiet Enjoyment
This has nothing to do with noise in and around the leased premises. It provides a warranty by Landlord that it has the legal ability to convey the possession of the premises to Tenant.
Security Deposit
A deposit of money by a tenant to a landlord to secure performance of a lease.
Special Assessment
Any special charge levied by a taxing authority against real property for public improvements (e.g., sidewalks, streets, water and sewer, etc.) that benefit the assessed property.
Subordination Agreement
As used in a lease, the tenant generally accepts the leased premises subject to any recorded mortgage or deed of trust lien and all existing recorded restrictions, and the landlord is often given the power to subordinate the tenant's interest to any first mortgage or deed of trust lien subsequently placed upon the leased premises.
Tenant Improvements
Improvements made to the leased premises by or for a tenant.
Trade Fixtures
Personal property that is attached to a structure (i.e. tenant shelving or displays) that are used in the business. Since this property is part of the business and not deemed to be part of the real estate, it is typically removable upon lease termination.
Triple Net (NNN) Rent
A lease in which the tenant pays, in addition to rent, certain costs associated with a leased property. This may include property taxes, insurance premiums, repairs, utilities, and maintenance. There are also “Net Leases" and “NN” (double net) leases, depending upon the degree to which the tenant is responsible for operating costs.
Use
The specific purpose for which a parcel of land or a building is intended to be used as specified in the lease.
