s m G r e OCCUPANCY COST T The total cost of leasing space, including minimum rent, percentage rent, taxes, insurance, maintenance, parking fees, t N advertising fees, merchant association fees, and any other charges assessed on a periodic basis. n I e OPTION m S A right given in exchange for consideration (i.e., something of value) by a landlord to a tenant to buy or lease the e property under specific terms and conditions for a specific period, without obligating the tenant to exercise the right. e REHI r There are two common forms of options in commercial lease agreement: (a) option to extend (b) option to purchase. A g 843.300.5387 A POSSESSION www.rehouseintl.com E e In commercial lease agreements, possession describes the giving or taking of occupancy of a premises. Possession of s a property can occur before, at the same time, or after the commencement date of the lease or commencement of rent. L a e L RENT ABATEMENT A release of a tenant’s obligations to pay rent for a period under certain specified situations, such as a casualty event or d L an act of God. e s A U RENT CONCESSION I y A period of free rent given to the tenant by the landlord. l t n C RIGHT OF FIRST REFUSAL e u As a commercial lease agreement term, this refers to the negotiated right of a tenant to match any bona fide offer received by a landlord to lease or sell the demised premises. q R e r F RULES AND REGULATIONS E Often an exhibit to a lease describing important operational aspects of the building or complex, such as hours of operation, noise control, parking regulations, delivery procedures, trash removal, etc. M SUBLEASE A lease where the original tenant sublets all or a portion of the leasehold interest to another tenant (referred to as the “subtenant”) while still retaining a leasehold interest in the property. M TENANT IMPROVEMENT (TI) ALLOWANCE O An amount, negotiated in the lease, that a landlord is willing to give a tenant to make improvements to the premises. Landlords typically recover the tenant improvement (TI) allowance from the tenant through the rent over the lease term. C TENANT IMPROVEMENTS Modifications to the leased property to accommodate the specific needs of the tenant, such as interior walls, flooring, light fixtures, doors, window treatments, etc. Tenant improvements can be inside or outside of the premises and can be paid for by the tenant, landlord, or both. The costs of these are typically negotiated during the initial leasing process. USE CLAUSE A use clause limits how the tenant can use the rented space. The limitations can be as broad as what business can be conducted there or as narrow as what specific services or products can be offered. USE PERMIT A permit obtained from the local planning department (at the city or county level) that allows an owner or tenant to use a property for a purpose not permitted under the standard zoning ordinance. A tenant may insist that they secure a use permit prior to finalizing any long-term lease agreement. REHI 843.300.5387 www.rehouseintl.com