SHORT COMMERCIAL REAL ESTATE GLOSSARY
To help you find the terms when you begin your search for commercial space, here is a short glossary used in the world of commercial real estate.
Rental improvement
All development work conducted in the rented premises, whether before or during the lease term, is undertaken by the tenant. Such rental improvement work is typically executed within a development period agreed upon during negotiations
Commercial lease
The commercial lease generally favors the owner, but it is important to know that the commercial lease can be negotiated in its entirety. The commercial lease provides security for the tenant because it allows the latter to carry out their activity within a well-defined long-term framework.
The lease will specify rent increases, renewal conditions, and the lessor's work. For complete security, you will need to publish the lease in the land register.
Bond and security deposit
given when signing the lease, the security deposit usually represents between three and six months of the gross rent. This deposit secures the commitment. The owner can also request a bond from the directors or officers of the company, who therefore undertake to personally assume the tenant's obligations towards the lease.
Net rent
This is the basic rent. This is the rent to which an additional rent will be added.
Additional rent
Add to the net rent the additional rent may or may not include variable costs: administration fees, insurance, municipal taxes, school taxes, building maintenance expenses, management fees, etc.
Gross rent
Net rent added to the additional rent gives the gross rent (Gross lease). From the gross rent, energy costs (electricity, heating, internet, air conditioning) and provincial taxes (GST/TVQ) must be added.
Publication of the Lease
The Civil Code provides that a commercial lease concluded in Quebec may be published in the Quebec Land Registry. If the building is ever sold, the new owner must accept and respect this lease without terminating it.