You find a space you like. The rent looks fair. So you are ready to sign, right?

Not yet. The rent is not the whole bill. And some parts of a lease are up for talks. Some are not.

Here is how to tell them apart.

What can you negotiate in a lease?

Most of the time, you can negotiate these four things:

• Base rent. The main rent you pay for the space.
• Term. How long the lease lasts.
• Security deposit. Money you pay up front. The landlord holds it in case of unpaid rent or damage.
• TI money. TI stands for tenant improvements. It is money the landlord gives you to fix up the space.

What else can you ask for?

You can ask the landlord to do some work on the space. Or you can ask for TI money.

You can also ask for a few months of free rent. This is called rent abatement.

What can’t you negotiate?

Most of the time, two things are set:

• Insurance. The lease says what kinds of insurance you must carry. That part is usually fixed.
• NNN charges. These apply to all the tenants in the building. So they usually can’t be changed.

What is a NNN charge?

NNN means triple net. You pay your rent. Then you also pay your share of three costs:

1. Taxes on the building.
2. Insurance on the building.
3. CAM. That stands for common area maintenance. It is the upkeep of the shared parts, like the parking lot.

Your share is set by your size. Taxes and insurance are most often a set percent for each tenant. It is based on how much space you lease. Say a plaza has 10 suites, all the same size. You lease one. You pay one-tenth.

Is there a NNN charge you can push back on?

Yes, sometimes. Some landlords add property management to the CAM charges. Property management means paying someone to run the building.

I have seen this one get negotiated. A tenant says, “I don’t want to pay for property management.” Then it can be taken out. So read the CAM list.

Is it a gross lease or a NNN lease?

Every lease is different. Here are the main kinds:

• Gross lease. Everything is included in the rent.
• Modified gross lease. Some things are included. Some are not.
• NNN lease. You pay rent plus your share of taxes, insurance and upkeep.

Plan to pay your own utilities, too. Utilities are things like power, gas and water.

Make sure you understand that it’s not just the base rent. Know exactly what the charges are and exactly what you are paying for.

In Kas’s words

What this means for you

Before you sign a letter of intent or a lease:

1. Ask what kind of lease it is. Is it gross, modified gross or NNN?
2. Ask for a list of every charge. Know what each one pays for.
3. Negotiate what you can: rent, term, deposit, TI money and free rent. And check the CAM list for property management.

My take

It is not just the base rent. Know what you are paying for before you sign a letter of intent, not after.

How I can help

I help business owners lease space in North Olmsted and across the west side. Read more North Olmsted articles. Not ready to tour yet? Read what to have ready before you look. Want to see free rent in action? Read how a Rocky River owner got it.

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