Understanding the Basics of Shopping Center Leases
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UPDATED: Aug 27, 2013
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The shopping center lease is a private contract between the individual renter leasing the space and the landlord owner who rents out the space in the shopping center. Although the parties negotiate the contract terms in ways they best see fit, every shopping center lease does have typical lease provisions.
Understanding Shopping Center Leases
The shopping center lease generally specifies both the rent and the length of time the tenant will occupy the space. Often, the tenant pays a base rent that is tied to the square footage of the store. In addition, the tenant may be required to pay a certain percentage of gross sales. It is also common that the tenant contributes a portion of the expenses to maintain the common areas of the shopping center, as well as pays part of the property taxes.
In addition to clauses regarding the length of the lease and the amount of rent due, there are other provisions necessary for the protection of the landlord and tenant. A tenant may want an “option to renew” to let him keep the space, if s/he chooses, at the termination of the lease. The lease agreement will probably specify what changes the tenant may make to the space, such as reorganizing, redecorating, and repainting. There may be limitations on the type of business the tenant can run and there may be requirements that the landlord not rent space in the same location to a direct competitor.
These are just a few examples of possible clauses that could be found in a shopping center lease agreement. If you are considering renting space in a shopping center, you may want legal assistance to make sure your rights are protected and the lease agreement is fair.