A full-service lease is an agreement in which the owner of a property allows someone else to use it in exchange for rent. In this type of lease, the owner takes responsibility for expenses such as maintenance, insurance, and taxes. This relieves the tenant from having to worry about these matters, similar to renting a house where the landlord handles all the necessary tasks.
A full-service lease is an agreement in which the property owner (lessor) covers all maintenance costs, insurance premiums, and property taxes. For example, a company may lease a commercial office space under a full-service lease, with the lessor responsible for all property-related expenses. The lessee only pays the agreed-upon rent. This type of lease is common in commercial real estate, allowing the lessee to have a predictable rent amount while the lessor takes on the responsibility and risk of managing the property.
A full-service lease is a type of commercial lease in which the landlord is responsible for all operating expenses, including property taxes, insurance, maintenance, and utilities.
Tenants benefit from a full-service lease because they have predictable monthly expenses and do not have to worry about unexpected operating costs.
The drawback for tenants is that the base rent in a full-service lease is typically higher to account for the landlord covering operating expenses.
The landlord is responsible for all operating expenses, as well as building maintenance and repairs.
Yes, operating expenses can increase during the term of a full-service lease, and the lease should outline how these increases will be handled.
Yes, tenants can negotiate the terms of a full-service lease, including the allocation of operating expenses and the base rent.
If operating expenses exceed the landlord’s estimates, the landlord may pass on the additional costs to the tenant, or the lease may include a cap on operating expense increases.
It is possible for a full-service lease to be converted to a triple net lease, in which the tenant is responsible for all operating expenses.
Tenants should carefully review the terms of the lease, including the allocation of operating expenses and any provisions for expense increases.
Landlords should carefully consider the potential operating expenses and the impact on the base rent before offering a full-service lease.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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