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Commercial Lease Agreement Fees


May 13, 2022

When a business owner is on the hunt for a new commercial space, there is much more to consider than just the monthly rent. One of the most significant costs that come with signing a commercial lease agreement are the various fees involved, which can add up quickly if not carefully reviewed.

In this article, we’ll dive into the different types of commercial lease agreement fees that a business owner should look out for.

1. Security Deposit

Similar to when renting a residential apartment, commercial landlords often require a security deposit. This deposit is intended to protect the landlord from any damage that may be caused by the tenant or any outstanding rental payments. Security deposits are typically one to two months` worth of rent and need to be paid upfront at the start of the lease term.

2. Application Fees

Some landlords may request an application fee to cover the costs associated with background and credit checks for potential tenants. While these fees are not standard, they can range anywhere from $50 to $500.

3. Administrative Fees

Commercial landlords may charge administrative fees to cover the costs of preparing and issuing legal documents, such as the lease agreement. These fees can include attorney, surveyor, and administrative costs and are usually non-negotiable.

4. Brokerage Fees

In some instances, tenants may work with a broker to help them find their desired commercial space. If this is the case, the broker may charge a commission fee, which usually equates to a percentage of the lease agreement`s total value.

5. Common Area Maintenance Fees (CAM)

Common area maintenance fees are costs that landlords pass onto tenants to cover the maintenance and repair of common areas, such as hallways, restrooms, and parking lots. These fees are typically measured and allocated on a per-square-foot basis.

6. Utilities and Taxes

Depending on the terms of the lease agreement, tenants may be responsible for paying various utilities, such as electricity, water or gas, and other expenses related to the property`s taxes.

In conclusion, commercial lease agreement fees can add up quickly and significantly impact a business`s bottom line. Therefore, potential tenants should carefully review and negotiate any fees upfront before signing a lease agreement. By doing so, business owners can avoid any unexpected costs that may arise down the line, allowing them to focus on growing their business instead.

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