Last Updated on March 25, 2024

What is Additional Rent? | Real Estate Definition

By Alan F Macdonald

What is Additional Rent?

Additional rent is what a commercial landlord would charge their tenants for costs to keep up the property. Usually the additional rent is based on the square footage of each rental unit. This is actually quite similar to condo fees in a condominium.

Real Estate Agent Explains Additional Rent

Because there are fluctuating costs associated with managing a building or complex, additional rent may be different each year – based on an calculation made by the landlord. Costs will be proportional to the tenant’s use of the building or size of the tenant’s unit. Costs that will be passed on to tenants may fall under the following categories:

  • Property taxes
  • Insurance premiums
  • Parking maintenance
  • Exterior maintenance
  • Landscaping and snow removal
  • Utility costs for common areas (Hallways, parking areas, yard areas, vestibules, elevators)
  • Maintenance costs

Each tenant will have a proportionate share of these costs that they must pay along with their monthly rental costs.

Why Does It Matter?

It is an important consideration for a commercial tenant to think about their additional costs when leasing a space. The monthly rental charge is not the entire cost of the lease. Each building will have different costs associated with maintenance, utilities and taxes. Always make sure to understand the method by which a landlord is calculating additional rent and keep an eye on cost estimates for the coming year.

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