An extremely important thing to understand when looking at Commercial Space is how the Landlord is going to bill you for your space. Commercial Leases are very complex documents where a simple element like a common garbage room could impact several areas of the Lease including your Base Rent, your maintenance obligations, hazardous substance disposal, your obligation to provide additional chattels, just to name a few.
The first thing to consider is HOW your space is measured. Does the definition of the method of calculation (for example BOMA 1980, 1996 or 2010) include a portion of any shared utility or garbage room? IF it does, then you will be paying base rent, taxes and CAM on a portion of these rooms.
A simple example :
Other Landlord may recover the cost of these types of spaces in their definition of Operating Costs so it is important to carefully read the Lease and its definitions in detail. It may reference a base rent charge on this space – and even other space that the Landlord occupies :
Here’s an excerpt from a Lease –
Now that you’ve figured out the cost of this common garbage room, you need to understand your rights and responsibilities when you use it! Who is providing the bins? How is the garbage picked up? Is there an increased risk of rodent or pest infestation due to a particular tenant’s use – either yours or your neighbor? How will any snow be removed if applicable? Are there costs associated with access keys or will access be unrestricted?
There are times when Proportionate Share of costs is not in your favour! If you are a retail store selling women’s fashion, disposing of mainly inventory boxes and packaging – you would not want to equally bare the costs with the food use tenant who creates a need for pest control and refrigerated disposal units as per the municipal guidelines. In these instances clauses that speak to disproportionate use are an important addition.
Knowledge is Power