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For more information please see How We Get Paid. But what do they really mean, and what are some of the key similarities and differences between them? But on the other hand, with a rental agreement the landlord also has the freedom to change the terms including the price at the end of each day period as long as he or she provides you with written notice. Related Article: Real Estate Investing. However, commercial leases differ based on what is included in the lease.
Some commercial leases are all-inclusive. This is often called a gross lease or a full-service lease. Other leases are not all-inclusive. These are called net leases. With a net lease you pay the landlord once a month for rent, plus your share of some of the common charges.
Then you may be on your own to set up and pay for things like janitorial services and utilities. The lease agreement is very specific in detailing the responsibilities of both parties during the lease and it includes all the necessary information to ensure that both parties are protected. The length of the lease and the amount of monthly rent are documented and cannot be changed. This ensures that the landlord cannot arbitrarily just raise the rent and the tenant cannot just leave the property whenever they want without repercussion.
The lease agreement is effective for the specific time stated in the agreement and is then considered ended. If the tenants wish to remain in the property, both parties must enter into a new lease agreement. A landlord is not obligated to renew the terms of the old lease and is free to change terms and rental amounts if desired.
For this reason, some tenants prefer to sign a longer-term lease if the monthly rent is very reasonable and in an area where rents are likely to increase during the term of the lease. A rental agreement differs from a lease agreement in that it is not a long-term contract and usually occurs on a month-to-month basis.
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