Full-Service Lease

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 2,680 reviews

Jump to Section

Need help with a Full-Service Lease?

Post Project Now

Post Your Project (It's Free)

Get Bids to Compare

 Hire Your Lawyer

What is a Full-Service Lease?

A full-service lease typically refers to a commercial lease agreement where the charges are all-inclusive. In this case, the tenant only pays the base rent. At the same time, the landlord takes care of all the operating expenditures, including taxes, maintenance, and support costs.

Key Terms in a Full-Service Lease

Understanding the lease terms used in a full-service lease will help you choose the right type of lease. Here is a list of the most common terms used:

  • Base Rent : A predetermined minimum amount that every tenant must pay every month. The base rent is always a fixed amount and is usually quoted in square feet.
  • Operating Expenses : They include all costs associated with running a property. Operating expenses include insurance, property management fees, repairs, and taxes.
  • Turnkey : The term refers to a fully renovated apartment or building readily available for rent.
  • Usable Square Feet : Refers to an area in a building that the tenant can use. USF doesn't include common areas like staircases, lobbies, public restrooms, and hallways.
  • Rentable Square Feet : The term defines the total usable square feet plus the building's common area. The tenant will have to pay for a portion of the building's shared spaces.
  • Addendum to Lease : An addendum to lease is a legal document added to the original lease agreement between the tenant and the landlord. The document caters to the additional information missed in the original lease.
  • Assignment of lease : A document allows the tenant to sell the lease to a third party. Most commercial leases contain this clause that allows the tenants to assign their lease to a new tenant.
  • Term : Refers to the period between the start and end.
  • Security Deposit : This is an upfront payment made by a tenant to secure against damage to the property or delayed rent payments.
Meet some lawyers on our platform

Donya G.

58 projects on CC
View Profile

Richard N.

77 projects on CC
View Profile

John P.

7 projects on CC
View Profile

Scott S.

12 projects on CC
View Profile

Here is an article with additional key terms.

Examples of Full-Service Leases

Example 1

If a tenant leases a 4,000 Square Feet space and is charged $40 per square foot, the payment they will make would be:

  • $40 per Square Feet per year X 4,000 SF = $160,000 per annum or $13,333 per month. The $13,000 monthly charges include the base rate and all operating expenses.

Example 2

Some leases may contain an escalation clause that raises the rent annually by 2%.

  • So, a tenant will pay $160,000x 102%/100=$163,200. The rent will rise by $3,200 in the second year.

ContractsCounsel Full-Service Lease Image

Advantages of a Full-Service Lease

Below are six advantages for tenants in using a full-service lease.

  1. It's preferred by tenants who follow a strict budget. The tenants only pay for the base rent and don't have to worry about paying for the operating expenses.
  2. It helps the tenants to have one predictable rental amount. However, it's worth noting that operating expenses like maintenance and utilities keep fluctuating, thus creating uncertainty about the exact amount to be paid each month.
  3. The landlord is responsible for maintaining the building. Therefore, the tenants can concentrate on running their business because they don't have to worry about the facility's state.
  4. The tenant doesn't have to worry about a significant appliance breakdown. The property owner will replace it without charging extra money.
  5. These leases help the owner attract quality tenants who would like to use the premises for several years.
  6. In some countries, the expenses incurred can help the landlords get significant tax breaks, especially if they have several properties.

Here is another article explaining the advantages

Disadvantages of Full-Service Leases

Below are four disadvantages of using a full-service lease.

  1. A full-service lease mostly favors the tenants and not the landlord. The landlord is responsible for maintaining the physical condition of the premises and all its systems.
  2. It's not a good option for property owners who don't want to hire a property manager.
  3. Not ideal for tenants who want to customize the property to suit their preferences. The tenants have little say because the property manager determines the property's general appearance.
  4. Most full-service leases charge higher rent compared to other commercial lease agreements. Most property owners fear incurring losses by paying a lot of operating costs. They instead transfer the operating costs to the tenants by charging higher rental fees.

Gross Lease vs. Full-Service Lease

A gross lease and full-service lease usually refer to the same thing because the landlord usually caters to all operating expenses in both cases. However, in some full-service leases, the tenants might be required to pay for some expenses.

Some countries use the modified gross lease to relieve the landlord from paying for all building operating costs. Therefore, the operating costs are passed to the tenants. In addition to paying the rent, the tenants are supposed to take care of some utilities and janitorial services.

Click here if you want to know more about these types of leases.

Full-Service Lease vs. Net Lease

A net lease is a common commercial real estate agreement that allows tenants to pay rent plus an additional amount to cover the building's operating expenses. Such operating expenses include:

  • Property taxes
  • Common space maintenance fee
  • Insurance

There are different types of net leases, and each type has its level of obligations that a landlord passes to the tenants.

The landlord calculates each tenant's pro-rata share by determining the total operating cost per square foot. After calculating the total operating cost for all rentable spaces, the landlord divides that amount based on each tenant's space.

The tenant only pays for the rent and utilities on the full-service lease. In contrast, the landlord pays all the building expenses, including the insurance, real estate taxes, and maintenance costs. However, a tenant might be required to cater for additional charges after the first year of tenancy.

Here is another article that can help you understand the difference better.

Triple Net Leases vs. Full-Service Leases

A triple net lease, also known as NNN, is among the commercial leases where the tenant is supposed to pay rent and other commercial property operating expenses. In addition, the tenant is liable for paying rent, maintenance fees, taxes, and building insurance.

In the NNN lease, the tenants pay reduced rental prices compared to a full-service lease. Landlords lower the rent because the tenants have agreed to pay for the operating expenses.

The triple net leases are usually long-term and often have concessions for rent hikes. However, some tenants might want to break their leases if the maintenance fees are higher than usual.

Some landlords use the bondable net lease to avoid instances where the tenant wants to break their leases before their period expires.

Since all the operating expenses are shifted to the tenants, most people avoid the NNN leases because the property taxes and insurance could increase. On the other hand, some tenants prefer full-service leases over the NNN lease because the landlord bears all the risks.

Please reference here if you have a question about the leases mentioned above.

Get Help with Leasing Issue

Full-service lease is among the most common type of commercial leases today. However, it can be pretty challenging to determine the type of lease that suits your need. Hire an expert today to help you evaluate the best leasing option.

Post a project in ContractsCounsel’s marketplace to get flat fee bids from lawyers to help you with your legal projects. All lawyers are vetted by our team and peer-reviewed by our customers for you to review before hiring.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Full-Service Lease Lawyers

View Maxwell
Member Since:
September 24, 2020

Maxwell L.

Lawyer, Owner
Free Consultation
Get Free Proposal
New Berlin, WI
11 Yrs Experience
Licensed in WI
Marquette University Law School (JD)

Firm rated best ADR firm for Wisconsin and won an award for cultural innovation in dispute resolution from acquisition international magazine in 2016 and it was rated "Best of Brookfield" by Best Businesses in 2015. Attorney Maxwell C. Livingston was rated 10 best in Labor & Employment Law by American Institute of Legal Counsel and 40 Under 40 by American Society of Legal Advocates for 2016; he also won 10 Best by American Institute of Family Law Attorneys. He is licensed in Wisconsin in all state and federal courts, and in the 7th Circuit Court of Appeals, wherein he won a landmark decision in McCray v. Wielke.

View Richard
Member Since:
October 1, 2020

Richard E.

Senior Partner, Attorney
Free Consultation
Get Free Proposal
Dallas-Fort Worth
14 Yrs Experience
Licensed in TX
Juris Doctor – University of LaVerne College of Law

Richard is a wizard at taking on bureaucracies and simply getting the job done. His clients value his straight-forward counsel and his ability to leverage a top-notch legal staff for efficient and effective results. Richard is a professional engineer, professor of law, and has been named among the top 2.5% of attorneys in Texas by the Super Lawyers®. When he is not driving results for his clients, Richard can be found with his small herd on his Texas homestead.

View Seth
Member Since:
September 30, 2020

Seth S.

Attorney
Free Consultation
Get Free Proposal
New York
8 Yrs Experience
Licensed in NY
Touro Law School

I am an attorney admitted in NY, with over 6 years of experience drafting, reviewing and negotiating a wide array of contracts and agreements. I have experience in Sports and Entertainment, Real Estate, Healthcare, Estate Planning and with Startup Companies. I am confident I can assist you with all of your legal needs.

View Rishma
Member Since:
October 1, 2020

Rishma E.

Attorney-at-Law
Free Consultation
Get Free Proposal
Miramar, FL
8 Yrs Experience
Licensed in FL
St. Thomas University School of Law

Rishma D. Eckert, Esq. is a business law attorney who primarily represents domestic and international companies and entrepreneurs. A native of both Belize and Guyana, she remains engaged with the Caribbean community in South Florida: as a Board Member and General Counsel for the Belize American Chamber of Commerce of Florida, and Member of the Guyanese American Chamber of Commerce. She holds a Bachelor of Laws degree (LL.B.) from the University of Guyana in South America, a Master’s degree in International and Comparative Law (LL.M.) from Stetson University College of Law in Gulfport, Florida, and earned a Juris Doctor degree (J.D.) from St. Thomas University School of Law in Miami, Florida. Licensed to practice in the State of Florida and the Federal Court in the Southern District of Florida, Mrs. Eckert focuses her passion and practice on domestic and international corporate structuring and incorporation, corporate governance, contract negotiation and drafting, and trademark and copyright registrations.

View Mark
Member Since:
October 1, 2020

Mark A.

Attorney
Free Consultation
Get Free Proposal
Jacksonville, FL
18 Yrs Experience
Licensed in FL
University of Florida

Mark A. Addington focuses his practice primarily on employment litigation, including contractual disputes, restrictive covenants (such as non-competition, non-solicitation, or confidential information restrictions), defense of wage and hour, harassment, retaliatory discharge, disability, age, religion, race, and sex discrimination.

View Kiel
Member Since:
October 2, 2020

Kiel G.

Principal
Free Consultation
Get Free Proposal
Hollywood, FL
5 Yrs Experience
Licensed in FL
Florida State University

Founder and Managing partner of Emerald Law, PLLC, a business law firm specializing in contract drafting and corporate transactions. Kiel worked as in house counsel for a variety of companies before launching his own firm, and most recently served as the Chief Legal Officer for an international private equity firm.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call