Okay, you acquired a small commercial property, maybe your uncle left it to you or you managed to get a good deal on it. Now you're looking to lease it up and start raking in the big bucks like Trump!

You jumped online to find a commercial lease you could use and you wound up here.

The first thing you need is to understand the terms that are common in the commercial leasing industry, otherwise the forms will do you little good.

CAM (Common Area Maintenance) : Amounts charged to tenants for expenses to maintain hallways, restrooms, parking lots, and other common areas. This may also include taxes, insurance, common area lighting, lawn care and snow removal. Building maintenance and improvements and even special assessments like road, sewer or water upgrades. CAM fees can escalate at a different rate than the monthly lease rate because they tend to be more variable. Your lease should differentiate between variable and fixed CAM fees. (see terms Net Lease and Gross Lease!

Gross Lease: In a gross lease, the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership. Most apartment leases are gross leases. .

Modified Gross Lease: The industrial modified gross lease is common among multi-tenant industrial buildings. As with a modified gross lease, the landlord will generally pays for the base year property taxes and building insurance. Tenants are generally responsible for their share of common area operating expenses and common area utilities.  Services that the Landlord provides differs from lease to lease.

There are numerous types of modified gross leases that are commonly utilized in multi-tenant office buildings. A modified gross lease is similar to a full service gross lease, except that some of the base services are not included by the landlord (taxes, maintenance, insurance and utilities). The most common types of modified gross leases excludes maintenance, janitorial and electrical. This type of lease is commonly utilized in medical office buildings or multi-tenant single floor office buildings, where different tenants have varying needs for electrical or janitorial services. In general, this type of lease requires separately metering individual office suites to determine electrical usage. Generally in a modified gross lease the Landlord has the right to expense pass-throughs utilizing a “base year.”

Net Lease: In commercial real estate, a net lease requires the tenant to pay, in addition to rent, some or all of the property expenses which normally would be paid by the property owner (known as the "landlord" or "lessor"). These include expenses such as real estate taxes, insurance, maintenance, repairs, utilities and other items.
 
Single net lease: In a single net lease (sometimes shortened to Net or N), the lessee or tenant is responsible for paying property taxes as well as the base rent. Double- and triple-net leases are more common forms of net leases because all or the majority of the expenses are passed on to the tenant.

Double net lease: In a double net lease (Net-Net or NN) the lessee or tenant is responsible for property tax and building insurance. The lessor or landlord is responsible for any expenses incurred for structural repairs and common area maintenance. "Roof and structure" is sometimes calculated as a reserve, the most common amount is equal to $0.15 per square foot.

Triple net lease: A triple net lease(Net-Net-Net or NNN) is a lease agreement on a property where the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance (the three "Nets") on the property in addition to any normal fees that are expected under the agreement (rent, premises utilities, etc.). In such a lease, the tenant or lessee is responsible for all costs associated with the repair and maintenance of any common area.

PROPORTIONATE SHARE: (Pro Rata) The Tenant’s proportionate share of operating expenses are calculated on a square footage basis. Tenant’s Sq. Ft. divided by Total Building Sq. Ft. = Tenant’s proportionate share 

BASE YEAR: A “Base year’ is typically utilized in multi-tenant full services gross office building leases to determine “base” cost for operating expenses within the project. The base operating expense account is the floor over which any increases in operating expenses will be passed on to the tenants of the building. In general, a base year is calculated on a calendar year basis or the first 12 months of Tenant’s occupancy.

EXPENSE STOP: An expense stop is the preferred method for expense calculation by a Landlord. This vehicle allows a Landlord to estimate the approximate expenses the building will incur and the tenant is responsible for payment of their proportionate share of actual operating expenses over the estimated expense stop. This is rarely utilized anymore as it led to fraudulent estimates of expenses in the past and unexpectedly high operating expense pass-throughs to tenants.

DISCLAIMER: I am not an attorney, these forms are provided free of charge and I am not liable for any thing you do! Turn-Key Properties LLC our employees, pets, friends, family members and contractors are completely exempt from your stupidity! I/we strongly suggest you consult an attorney, lawyer, tax adviser and maybe even a member of clergy before using something you found online! By clicking on these links and downloading these forms you completely exonerate and exempt us and anyone else from your actions. These documents were posted March 20, 2012 and may or may not meet your state, local or municipal requirements. May God have mercy on your soul!

So you want to be a landlord, personally I'd advise you to hire a property manager but I'm generally very willing to help you get started. Most people simply aren't cut out for the unpleasant experiences that come with managing rental property, especially residential property.

So to get you started I thought I'd give you a few pointers and offer some free forms to use and well as some free advice.

Like everything else in America, there are so many stupid rules and laws you are required to abide by it would make your head swim. Most everyone knows you can not discriminate against anyone based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents or legal custodians, pregnant women, and people securing custody of children under the age of 18), and handicap (disability).

But there is much more to the restrictions and guidelines... Lead Based Paint forms and signatures you must obtain on government documents. There are so many ways to get fined, sued or even jailed it would make your head spin around and toss some pea soup!.
Here are a few...

Title VI of the Civil Rights Act of 1964
Title VI prohibits discrimination on the basis of race, color, or national origin in programs and activities receiving federal financial
assistance.

Section 504 of the Rehabilitation Act of 1973
Section 504 prohibits discrimination based on disability in any program or activity receiving federal financial assistance.

Section 109 of Title I of the Housing and Community Development Act of 1974
Section 109 prohibits discrimination on the basis of race, color, national origin, sex or religion in programs and activities receiving financial assistance from HUD's Community Development and Block Grant Program.

Title II of the Americans with Disabilities Act of 1990
Title II prohibits discrimination based on disability in programs, services, and activities provided or made available by public entities. HUD enforces Title II when it relates to state and local public housing, housing assistance and housing referrals.

Architectural Barriers Act of 1968
The Architectural Barriers Act requires that buildings and facilities designed, constructed, altered, or leased with certain federal funds after September 1969 must be accessible to and useable by handicapped persons.

Age Discrimination Act of 1975
The Age Discrimination Act prohibits discrimination on the basis of age in programs or activities receiving federal financial assistance.
Title IX of the Education Amendments Act of 1972
Title IX prohibits discrimination on the basis of sex in education programs or activities that receive federal financial assistance.

Fair Housing-Related Presidential Executive Orders:

Executive Order 11063 prohibits discrimination in the sale, leasing, rental, or other disposition of properties and facilities owned or operated by the federal government or provided with federal funds.

Executive Order 11246, as amended, bars discrimination in federal employment because of race, color, religion, sex, or national origin.

Executive Order 12892, as amended, requires federal agencies to affirmatively further fair housing in their programs and activities, and provides that the Secretary of HUD will be responsible for coordinating the effort. The Order also establishes the President's Fair Housing Council, which will be chaired by the Secretary of HUD.

Executive Order 12898 requires that each federal agency conduct its program, policies, and activities that substantially affect human health or the environment in a manner that does not exclude persons based on race, color, or national origin.

Executive Order 13166 eliminates, to the extent possible, limited English proficiency as a barrier to full and meaningful participation by beneficiaries in all federally-assisted and federally conducted programs and activities.

Executive Order 13217 requires federal agencies to evaluate their policies and programs to determine if any can be revised or modified to improve the availability of community-based living arrangements for persons with disabilities.

As you can see this list just keeps getting more and more ridiculous!  Just wait til you are hauled into one of these Kangaroo Court "investigations", you will wish you had never invested in real estate. Here's a little story of how the whole scam works.

Fair Housing Myths is an article we wrote several years ago. In addition one of the things I see most often that will get landlords in trouble are advertising screw ups. Please take the time to read this article about what you can and cannot say in an advertisement for any property you are renting or selling!  Fair Housing words.

But enough of that you wanted some free forms to get you started.

NOTE: These forms may have been valid at the time I posted them, 3/19/2012 but I strongly suggest you consult an attorney before relying on anything you find on the Internet. This may or may not be all that is required by law in your situation, but the laws are so extensive and restrictive that no one can be sure at anytime that they are in complete compliance. At the very minimum consult with a professional before you engage in any real estate activity. I am not a lawyer and I do not know the laws of your particular state or municipality! Use these forms at your own risk. Turn-Key Properties LLC our members, founders, employees, contractors and even our pets,  friends and family members do not accept ANY liability whatsoever for your use of forms you find here! AGAIN... Consult an attorney!

By downloading these forms you agree to hold us completely harmless for any trouble you get into. Seriously, Talk to a LAWYER! Furthermore we are not responsible for any damn stupid thing you do!  

Why am I providing you with free documents... because frankly, eventually you will decide you can't stand doing this and will call me to manage your property. 816-313-8876.