Purchasing and leasing commercial real estate often provide a steady stream of income for savvy investors. Understanding the Ohio regulations for these transactions can help shield your business from costly errors.
Here are some answers to common questions new real estate investors ask about commercial leasing in Ohio:
Can I charge a security deposit?
Ohio allows landlords to collect an unlimited security deposit for both commercial and residential real estate transactions. However, if you require a deposit of more than one month’s rent or $50, you must pay the tenant at least 5% interest every year.
Who is responsible for repairs and maintenance?
Generally, landlords can structure an Ohio commercial property lease to shift responsibility for maintenance and upkeep of the property to tenants. However, if you expect your tenant to make a major investment such as replacing the roof or the HVAC system, you must specify these provisions directly in the lease.
What are the common payment structures?
Ohio recognizes three main types of commercial leases. With a gross lease, your tenant has responsibility for only the base rent. As the landlord or property manager, you take care of management fees and expenses. This is similar to the arrangement for a residential lease.
A triple net lease requires your tenants to pay the base rent and all the property’s fees, insurance premium costs, taxes and expenses. With a modified gross lease, you share a percentage of the expenses and fees with the tenant as established in the agreement.
Developing a lease that meets all the Ohio legal requirements for commercial properties can reduce the risk of costly disputes with your tenants.