Commercial Lease Glossary
Plain-English definitions of common commercial lease terms (tenant-focused).
Not legal advice. Use this glossary as a checklist and confirm specifics in your lease and local market.
NNN (Triple Net)
A lease structure where the tenant pays base rent plus some combination of property taxes, property insurance, and operating expenses (often via CAM).
Tenant tip: Compare all-in occupancy cost and insist on a clear definition + reconciliation/audit rights.
CAM (Common Area Maintenance)
Operating costs for shared areas/services (landscaping, snow removal, lighting, security, management fees). Sometimes includes capital items unless excluded.
Tenant tip: Ask for the CAM budget, last reconciliation, exclusions for capital, and audit rights.
Additional Rent
A catch-all bucket for pass-through charges billed in addition to base rent (taxes, insurance, CAM, utilities, admin fees).
Tenant tip: Treat it like rent—define it precisely and require proof via statements.
Repairs vs. Replacement
Many leases say the tenant “maintains” systems, but the real risk is being stuck with a full replacement of roof/HVAC/parking.
Tenant tip: Write down who pays to replace roof/HVAC/paving and cap any tenant responsibility.
TI (Tenant Improvements)
Buildout work to make the space usable for your business (walls, plumbing, electrical, kitchens, etc.).
Tenant tip: Put scope, approvals, timeline, and who pays in writing; protect yourself with lien-waiver processes.
LOI (Letter of Intent)
A pre-lease term sheet that sets major deal points (rent, term, TI, options). Often non-binding, but it frames the lease.
Tenant tip: Treat the LOI seriously—small “to be negotiated” items often become big lease problems later.
SNDA
Subordination, Non-Disturbance, and Attornment agreement—an agreement among tenant, landlord, and lender about what happens if the landlord defaults.
Tenant tip: Ask for non-disturbance so your lease survives a foreclosure (where possible).
Estoppel Certificate
A statement you sign confirming key lease facts (rent, term, defaults) often requested by lenders or buyers.
Tenant tip: Never sign an estoppel without verifying the facts; negotiate a reasonable review period.
Assignment / Sublease
Rules for transferring the lease to a buyer or subtenant. Landlords often require consent and may impose conditions.
Tenant tip: Negotiate objective consent standards and avoid clauses that let the landlord block a sale.
Personal Guarantee
A promise (often by the owner) to pay the lease if the business can’t. Guarantees can be broad and survive termination.
Tenant tip: Push for a limited guarantee or “burn-off” after time/performance.
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