Page 48 - Commercial Lease FlipBook 2020
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PRIME RATE:
The rate of interest charged to a bank's most credit worthy customers. The Prime Rate plus an additional negotiated percentage is often used
when calculating interest on Late Fee/Charges in a commercial lease. The Prime Rate is subject to change and usually changes when the Federal
Reserve changes the fed funds rate.
PRO RATA (PROPORTIONATE) SHARE
A commercial tenant's CAM charges are almost always calculated on a Pro Rata (Proportionate) Share. A tenant's Pro Rata (Proportionate) Share is based upon
rentable/leasable square feet of the Premises per the lease divided by the total Building or Project rentable/leasable square feet.
PROPERTY/PROJECT:
The Building and land that often includes the Common Areas, parking garage, management office, residential units, commercial units, and amenity space.
PROPERTY DAMAGE (LANDLORD):
An insurance policy, as required in a commercial lease, that protects against the sudden and accidental damage to the Property.
PROPERTY DAMAGE (TENANT):
An insurance policy, as required in a commercial lease, that covers tenant's leasehold improvements, betterments, trade fixtures, merchandise, inventory, and
personal property.
RENT COMMENCEMENT DATE:
The date on which a tenant is obligated to begin paying Base/Minimum Rent. This may or may not be when the lease commences. This also may or may not be when
the tenant starts paying Additional Rent.
