Retail Space Rent

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Leasing Retail Space - Fees and Operating Expenses

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Houston Retail Space
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Operating Expenses for Retail Space

Retail space expenses are typically paid by the tenant. This includes items such has common area utilities, common area maintenance, insurance, property taxes and management. It would not include items such at tenant improvements for new tenants and leasing commissions for new tenants.

Depreciation

Non-cash expenses such as depreciation and amortization would also be excluded. While each lease is negotiable, most retail leases are done on a net basis with the tenant paying for most operational expenses.

Who Pays for Repairs and Replace for Tenant Space

Repair and replacement of the roof is typically handled by the landlord. However, in some leases the tenant is responsible for this expense. Repair and replacement of the HVAC system has always been a negotiated matter. In many leases the tenant pays for repairs and the landlord pays for replacement. This can cause disagreement as to whether the HVAC should be repaired again or replaced. Electrical and plumbing within the tenets defined space is typically the tenets responsibility.

Brokerage Fee

Payment of the brokerage fees should be addressed in the lease. If a tenant rep broker has been working with you to find space to negotiate a lease, you should have signed a representation agreement prior to working with the broker. This agreement would likely provide your commitment to work exclusively with the broker for a defined period. (Include a 30-day cancellation clause in case you are not satisfied with the work performed by the broker. In many cases, this agreement would still provide a level of protection to the broker if you lease space he had suggested.)

Document the Brokerage Fee, Even if You are not Paying

Your agreement with the broker should also document who is responsible for paying the brokerage fee. In most cases, this will be the landlord. However, even if you have already documented your agreement with the broker, it is better to affirm the agreement within the lease to minimize any misunderstandings.

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