Six Essential Office Leasing Terms
What are Base Year Escalations? Holdover Rent? Here is an article with six essential office leasing terms that you need to know, particularly when it comes to who is responsible for maintenance of office systems like HVAC. Be sure you know what you are getting into and if you are responsible, consider asking for or investing in an office warranty.
Below is an article here from Knowledge Leader – Colliers
Navigating an office lease can be a tricky task for just about anyone, and there are many office leasing terms that can impact your budget if you don’t fully understand them. Not all language will affect your bottom line directly, but if you don’t familiarize yourself with these six terms, expect to take a financial hit.
If your lease expires before you give notice to your landlord, it is permissible per the holdover provision of your lease for the landlord to charge you anywhere from 125% to 200% in additional rent. You might think this is outrageous, but keep in mind that your lease probably had a notice period giving you anywhere between 6 to 12 months prior to expiration to notify the landlord of your plans. Had you given notice, your landlord would have had adequate time to properly market your space. Without that heads-up, your landlord is subject to lost revenue; the only way of making that up is to charge you extra rent.
Useable Square Feet (USF) vs Rentable Square Feet (RSF)
Here is the quickest explanation of the two: useable SF is the actual square footage that you are using within your four walls. The rentable SF adds your proportionate share of the common space like the lobby, corridors, common restrooms, and so on. If you enter into a lease thinking you’re only paying on the USF when in fact you’re paying on the RSF, then your rent is going to be 15% – 20% higher than what you had expected.
Read more here from Knowledge Leader – Colliers