Commercial lease terms, defined

A percentage markup a landlord adds to the operating-expense pool to compensate for administering it, charged on top of expenses the tenant is already reimbursing.

A lease provision that allows rent to be calculated using a different methodology — often reduced rent — when specified conditions occur.

A negotiated sales threshold above which a tenant begins paying percentage rent, set below the natural breakpoint rather than calculated from it.

A tenant's agreement to recognize a new property owner or lender as its landlord following a foreclosure, transfer or similar event.

The reference year used to determine which operating expense increases a tenant is responsible for under certain commercial leases.

A limit on how much certain common area maintenance expenses can increase over time.

The circumstances in which a landlord may pass some or all of a capital improvement cost through to tenants.

A lease clause that gives a tenant specific rights when required occupancy conditions at a shopping center or property are not maintained.

Operating costs that a lease classifies as being within the landlord's ability to manage or control.

A clause addressing whether a tenant may stop operating from its leased premises while continuing to pay rent.

A CAM cap that generally applies after operating expenses have been calculated or allocated to a tenant.

A clause identifying costs that cannot be included in a tenant's operating expense or CAM charges.

A commercial lease structure where the tenant pays a stated rent and the landlord is responsible for some or all property operating expenses.

A provision that adjusts certain variable operating expenses to reflect a specified occupancy level.

What occurs when a tenant remains in possession of a space after the lease term expires without a formal renewal or extension.

A right for a party to terminate a lease when a defined performance condition occurs.

A financial instrument a tenant may provide as security for its obligations under a commercial lease.

A document in which a contractor, subcontractor or supplier waives certain rights to file a mechanic's lien.

The sales threshold above which percentage rent becomes payable when derived mathematically from minimum rent.

An agreement that a tenant's lease will generally remain in effect following a foreclosure or similar lender action.

Rent calculated using a tenant's sales, usually after sales exceed a defined breakpoint.

The percentage used to allocate certain property expenses to a tenant.

A landlord's right to reclaim some or all leased premises after a tenant takes a specified action.

The date on which a tenant's obligation to begin paying specified rent starts.

A tri-party agreement — Subordination, Non-Disturbance and Attornment — between landlord, tenant and lender.

The priority of a tenant's lease relative to another interest in the property, commonly a lender's mortgage.

A landlord contribution toward the cost of improving a tenant's leased premises.

A lease structure requiring the tenant to pay base rent plus its share of taxes, insurance and operating expenses.

A CAM cap that generally applies to a pool or category of operating expenses before the tenant's share is calculated.

A lease provision defining how a tenant is permitted to use leased premises.