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Terms to know when leasing a commercial property


Term: The length of time that you lease the space, usually with an option to renew.
T.M.I.: Taxes, Maintenance, and Insurance.
(T) Taxes are for Property taxes charged to the landlord for the total building and property.
(M) Examples of Maintenance costs or C.A.M. are landscaping, snow plowing, repairs to areas used by all tenants and their clients such as a parking lot.
(I) Insurance is the cost of insuring the entire building and property. Tenants still need to obtain their own Contents insurance or Tenant insurance.
Taxes & Operating expenses. Operating expenses include maintenance insurance, heat, hydro and water.
Common Area Maintenance costs, which is part of the TMI allows the landlord to keep the entire building in good repair.
Net Lease:
The tenant pays, in addition to their base rent, such expenses as T.M.I., heat, and hydro. These expenses are adjusted annually.
Gross Lease:
Monthly rent includes all expenses.
Common Areas:
The areas of the building or property used by all owners and/or tenants.
Usable Area:
The floor area than can be used by tenants. Generally the tenant's premises minus the public and service areas.
Rentable Area:
The measurement that the rent is based on. Proportionate share of common areas is added to this measurement to achieve the Rentable area.
Asking Price/Net Rent:
Most commonly expressed on a per square foot per annum basis. This is the dollar amount the landlord would like to receive for the space.
Gross Rent:
Can be expressed on a per square foot (psf) or monthly basis.
Asking price psf + T.M.I. = Gross psf
Gross psf x Rentable Area / 12 months = Gross per month.
Money offered by a prospective tenant to indicate their good faith in entering into the leasing contract with the landlord. The amount of deposit is calculate by adding together the first and last months rents, 2 months TMI (if applicable) and GST (7%)
Goods and Services Tax. GST is due on all rent and expenses.
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The information provided on this Web Site is derived from sources that The Monopoly Group believes are reliable. However, The Monopoly Group does not guarantee the accuracy of the information, which is provided without any warranties, express or implied, of any kind, nor do we assume any responsibility or liability whatsoever for publishing it herein. In respect of leasing premises, you and your advisors should conduct a careful, independent investigation of the property to determine to your satisfaction the suitability of the property for your needs.

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