Lease Terms

Addendum
A legal document that adds to or amends the terms of a standard form lease.

Aesthetics, general
The landscaping, greenery, views, maintenance or surrounding territories, and the like of the subject property.

Agency
A legal relationship created when an individual (the principal) delegates to another(the agent) the right to act on behalf of the principal in business transactions, specifically, the leasing of office space.

Agent
An individual authorized to represent and act on behalf of another person or entity (referred to as the principal).

Amenities
Tangible and intangible features that enhance and add to the desirability and value of a subject property, e.g. cafeteria, indoor parking,special janitorial services.

Assignment of Lease
The transfer of all title, right, and interest that a lessee possesses in certain real property. Also, the document used to convey a leasehold is called an assignment of lease rather than a deed.

Building standards
The specific items of construction which the developer or the owner decides to use throughout a building; for example, in an office building, building standards would offer a certain type of carpet, wall and floor coverings, etc.

Common Area
Common area in a building is typically the interior halls, vestibules, etc. leading to tenant space (not stairs or vents) in buildings where restrooms are off the halls, they are also included. The amount of common area in a building can vary from 7-15 %. Some leases charge back for common area, some do not.

Common Area Maintenance
When leasing space, it is customary that tenants pay in one fashion or another for costs incurred on their behalf. Costs for common area maintenance is a method of recapturing the costs for gas, electric, and operating costs for the common area of the building.

Competitive office space
The office space in a building in which there is possible turnover within the next 10 years.

Core Space
Square footage used for public corridors, elevators, washrooms, and electrical and janitorial closets.

Curb appeal
The aesthetic image and appearance projected by a building creating a first impression.

Demographics
The social statistics - age, race, density, distribution, wealth, education, occupation, nationality, and religion - of a population.

Escalation clause
A clause in a lease, contract, etc. permitting an adjustment of certain payments either up or down in order to cover certain contingencies.

Exhibit
Attachment to a lease that elaborates on points agreed to within that lease.

Finish Schedule
A list of items, such as floor coverings, wall coverings, and paint colors, that finish off a suite design.

Floor plan
The architectural drawings showing the floor layout of a building including precise room sizes and their interrelationships.

General Contractor
A construction specialist who enters into a formal construction agreement or contract with a real property owner to construct a building or complete a remodeling project.

Gross Lease
A type of lease under which the tenant pays a fixed rental and the owner pays all other operating expenses related to the property.

Guaranty
A pledge or security used to insure the landlord that the rent will be paid and all other terms, covenants, and conditions required in the lease will be performed.

Hold harmless lease clause or Indemnification clause
A standard provision that states that the owner will not be liable for damages or injury sustained in, on, or about the leased premises.

Hidden costs
Sometimes additional expense is realized in how operating costs are passed thru, i.e. using an old base year. Some companies also charge a management fee to all tenants.

HVAC system
The heating, ventilating, and air conditioning system of a building.

Insurance provision
A lease clause that requires the tenant to obtain a certain amount of public liability insurance and have the landlord named as co-insured in that policy.

Lease conditions
The provisions setting forth the agreed privileges, obligations, and restrictions under which a lease is made; also referred to as lease terms.

Lease proposal
A presentation made to a prospect regarding the general terms and conditions of a proposed lease.

Lessee
The individual or entity to whom property is rented or leased; often referred to as tenant.

Lessor
The individual or entity who rents or leases property to another, often referred to as landlord.

Marketing mix
A segment of the marketing strategy which outlines the use of controllable marketing variables (namely, product strategy, price strategy, distribution strategy, and promotion strategy) to achieve specified marketing goals.

Market survey
Up-to-date information collected and analyzed on other products distributed in a given area. In the office building market, a survey is made of comparables within the area surrounding the subject property and includes such in formation as net rental area, amenities, number of stories, and the like.

Multiple-tenancy floor
A floor of an office building that houses several businesses.

Net lease
A type of lease under which the tenant assumes the obligation to pay for utilities, real estate taxes, and other special assessments associated with the leased premises.

Net-net lease
A type of lease under which the tenant assumes the obligation to pay for utilities, real estate taxes, and other special assessments associated with the leased premises.

Net-net-net lease (triple net lease)
A type of lease under which the tenant assumes the obligation to pay for utilities, real estate taxes, and other special assessments associated with the leased premises plus ordinary repairs and maintenance and some capital improvements.

Noncompetitive office space
The office space in a building occupied by owners or long-term tenants (those with leases with 10 or more years remaining) and which consequently is not available to satisfy immediate demand.

Operating expenses
Periodic and necessary expenses essential to the operation and maintenance of an enterprise or a property.

Option
A provision that gives a tenant some right or privilege not otherwise granted within the standard rental agreement, e.g. option to expand, option to renew, option to cancel.

Property management
A professional activity in which someone other than the owner oversees the operation of a parcel of real estate and assists the owner in achieving the investment objectives.

Quiet enjoyment
A clause in most leases which states that the owner is obligated to protect the tenant against the claim of another firm that it is really the tenant of the specified space.

Rendering
A perspective drawing finished with ink or color to bring out the effect of the design (as in an architect's rendering of a proposed office building).

Rentable area
The total interior area in a building, usually expressed in square feet, that may be leased to tenants.

Rental clause
In an office lease, a provision that states the amount of rental to be paid, the method of payment, and to whom the payment is to be made.

Rental schedule
The listing of rental rates for units, suites, or space in given building.

Rights and obligations
A section of a typical office lease which clearly outlines the rights and obligations of the parties named in the lease.

Space planning
The planning and preparing of how space will be effectively used based on operational and aesthetic requirements and financial limitations of the potential tenant.

Strict performance
A lease article which permits the landlord to collect rent and still insist on strict performance of other lease provisions.

Sublease
A lease given by lessee for a part of the leasehold interest but holding on to some reversionary interest in the lessee.

Subordination clause
A lease clause usually required by the mortgagee which makes the lease subject to any first mortgage.

Substitution of premises clause
A clause within a lease which reserves the owner's rights to relocate various tenants to comparable offices within the building.

Tenant mix
The combination of occupant types within a building.

Tenant profile
A study and listing of the similar and dissimilar characteristics of the present tenants of a property.

Usable area
On a multi-tenant floor, usable area is the gross area minus core space. (Core space includes the square footage used for public corridors, elevators, washrooms, stairwells, and electrical and janitorial closets). On a single-tenant floor, the usable area is the gross square footage excluding the building lobby ducts, stairwells and elevators.

Workletter or construction rider
That part of the lease pertaining to all work that is to be done for the tenant by the landlord in detail.

Zoning
Establishment of districts in which specific enterprises may be located, designed to regulate and control the character and use of the property.