Welcome to the Kazi Law Firm! We are a boutique law firm steeped in Texas tradition personifying the warmth and congeniality consistent with southern hospitality. We believe in preserving integrity and professionalism with true Texan charm, staying true to our roots, while providing essential, affordable legal services to all. Located just north of Dallas, Texas in the rapidly growing suburb of Frisco; the Kazi Law Firm concentrates on contracts drafting and review, immigration law, will & estates, real estate law, landlord, tenant, mediation, and general business law needs.
In the world of commercial leases, the most commonly encountered leases are the net lease and the gross lease. Let’s talk about the differences between these two options and determine which is the best lease option for you.
The gross lease is the most tenant-friendly lease type because the rent is all-inclusive. Most, if not all, of the expenses associated with occupying the property, are covered, such as utilities, security, and janitorial services. These leases may also include property insurance and taxes, but these must be skillfully negotiated. Additionally, landlords agreeing to these types of leases should consider exceptions for tenants that consume excessive power or otherwise burden the all-inclusive aspect of the gross lease.
Triple Net Lease
Conversely, triple net leases are considered to be more landlord-friendly. In a triple net lease, the tenant not only pays rent for occupying the property, but also all taxes, insurance, and maintenance of common areas and services (lobbies, parking lots, janitorial services, security, etc.). The typical transaction usually consists of the following arrangement: the tenant pays a base amount of rent, plus an additional payment of some portion of each of three “nets” of property taxes (NNN), insurance, and common areas maintenance. Tenants usually only pay a proportionate share of the additional expenses.
Usually the landlord and tenant reconcile the additional rent paid with the amount of actual expenses incurred at the end of each lease year. Tenants must be wary of increases in the amounts of the additional rent, and may negotiate caps to ensure that they aren’t locked into a lease that increases rates to unacceptable or unduly burdensome levels.
While a triple net lease allocates the majority of the responsibility on the tenant, there are positive aspects for tenants as well. Tenants can see the business operating expenses transparently in relation to the amount they are charged, which leads to informed decision-making on leasing commercial property. Also, tenants may wind up paying less than they would have paid in a gross lease, which is usually staked high enough to provide a buffer for landlords if overhead costs rise.
As you can see, it’s imperative to understand the different types of commercial leases available before deciding which one is right for your business. Negotiating the terms and conditions of the lease agreement are integral and often make or break the tenancy experience. It’s critical to engage the assistance of an experienced real estate attorney to make a truly informed decision in commercial real estate dealings.
I built my law practice on the premise of being a life raft in a sea of sharks. I want to be an advocate for those that have been wronged and are too intimidated to seek help. My firm is here to explore your options, guide you through your legal journey, and give you that safe space to ask questions! There’s no such thing as a stupid question…Only the ones you don’t ask. So, my question to my clients is not “do you have any questions?” But rather “what questions do you have?”
As always, the Kazi Law Firm is standing by to help you in your time of need. Don’t hesitate to contact us today. We specialize in real estate law, landlord-tenant disputes, immigration, and wills & estate planning. Family is at the core of our practice. Just as we treat our family with respect and understanding, we treat yours. Come join the Kazi Law Firm family today!
Why swim alone in shark-infested waters when you don’t need to?