As a tenant entering into a commercial or retail lease, it is important to know what expenses you will incur as set out in the provisions of the lease. Once you come to an agreement with the landlord on an annual rent, whether gross (including outgoings) or net (not including outgoings) and the lease is signed, you are bound to comply with the requirements of your agreement. Contrary to the understanding of landlords and tenants alike, outgoings and utilities are not one in the same.
Outgoings extend to expenses of the landlord for the management and maintenance of the premises, taxes, rates, premiums and charges to the landlord which arise from the landlord’s ownership of the premises.
Utilities, on the other hand, are those expenses that arise from a tenant utilising the premises in carrying on their business. For example, utilities may include water usage, internet and data, gas, electricity and so forth. Utilities are not counted as part of the outgoings to which the tenant must contribute as they are charged to the tenant directly (although this is not always the case).
Utilities must therefore be factored into your budget in addition to annual rent when you are looking to rent a commercial space and in negotiations with a landlord.
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