Introduction to commercial rents
🏢 Introduction to commercial rents
A commercial lease is an agreement between an owner and a business (tenant) for the rental of a space for commercial, industrial, or professional purposes.
Unlike a residential lease, it offers greater contractual freedom: the parties can define their own conditions (duration, renewal, sharing of expenses, services, etc.).
Commercial leases are generally more complex, because their conditions are clearly more flexible than those of residential leases. Each agreement can differ according to the nature of the business, the negotiations between the parties, or the structure of the expenses.
This increased flexibility does not, however, mean less rigour — quite the opposite. Commercial leases require particular attention to detail, because each clause can have an important financial or legal impact for both parties.
Distinguishing the main elements of a commercial lease
Before scheduling a commercial rent in Plexflow, it is essential to clearly understand the fundamental components of a lease.
They serve as the basis for the correct setup of the rent and for the proper allocation of charges.
This structure is often found in so-called “triple net” or "NET NET NET" leases, where the tenant pays not only the base rent, but also the majority of the building’s operating costs.
This type of lease lets the owner transfer a large part of the expenses related to the property (maintenance, insurance, property taxes, etc.) to the tenant, while maintaining a more stable net income.
1. The base rent
This is the agreed fixed amount between the owner and the tenant for occupancy of the premises, before any additional expense.
This amount can be determined either as a fixed monthly price, or according to a rate per square foot per year (e.g. $15/sq. ft/year).
A frequent particularity of commercial leases is the addition of a renewal option clause.
This lets the tenant extend the duration of the lease under predetermined conditions, often accompanied by an indexation clause or a price adjustment at renewal. This flexibility aims to offer long-term stability to the tenant while preserving the owner’s profitability.
In Plexflow, it is possible to set up several rent periods (e.g. year 1 at one amount, year 2 at another) to reflect these contractual changes.
👉 Consult this detailed article to learn how to proceed: How to schedule several rent periods in Plexflow
⚠️ The amounts must be determined in advance for each period.
If the lease provides for indexation according to an index (e.g. CPI), Plexflow does not automatically calculate this increase.
You will then have to manually adjust the rent amount at the appropriate time.
To avoid forgetting to make the adjustment, it is advisable to create a reminder directly in the Plexflow calendar on the scheduled date of the rent review.
👉 Refer to this article to learn how to do this:
How to add a reminder in the Plexflow calendar
2. The applicable taxes (GST and QST)
Commercial rents are generally subject to federal and provincial sales taxes, namely GST (5%) and QST (9.975%).
These taxes normally apply directly to the base rent, additional rents, and services, according to the nature of the fees billed.
To learn more about setting up taxes in Plexflow, consult the following articles:
- How to add taxes when creating a new lease in Plexflow
- How to add taxes to a lease that has already started in Plexflow
- How to add taxes to a service in Plexflow
👉 Other taxes, such as municipal or school taxes, are instead considered operating expenses and will be covered in the Additional rent section below.
Among these, the commercial municipal tax, also called the commercial property tax or non-residential property tax, is imposed by the municipality according to the property assessment of the building and the tax rate applicable to the commercial sector.
It is generally added to the school tax and is part of the common charges rebilled to the tenant under the lease.
3. Additional rent
Additional rent groups the operating expenses and the common charges related to the management and maintenance of the building.
You will find in particular:
- Municipal and school taxes
- The non-residential property tax
- Maintenance fees for common areas
- Snow removal and landscaping
- Building insurance
- Security or janitorial services
👉 In summary, in a triple net (NetNetNet) lease, the tenant assumes the base rent, the operating fees, and the property taxes, while the owner retains management of the real estate asset. This model lets the owner stabilize their income, while the tenant takes on most of the actual occupancy costs.
Setting up additional rent in Plexflow
From a system setup point of view, it is important to clearly understand how the additional rent was determined in the contract, in order to faithfully reproduce the payment structure.
Two main options are available to you:
Option | When to use it | What to check |
|---|---|---|
Option 1: Fixed monthly amount | When the lease provides for a stable amount added to the base rent. | Create a distinct service per item. Apply GST/QST if taxable. |
Option 2: One-time amount | When a charge must be billed only once on a given date. | Choose a date different from the regular rent. Enter the amount if taxes apply. |
Option 1 – Fixed monthly amounts
Used when the lease provides for a stable amount each month to cover operating expenses (e.g. $100/month + taxes for parking).
👉 You then simply add this amount in the Services section of Plexflow, so that it is automatically included in each billing period.
👉 For more details, consult the article: How to add additional rent as a fixed amount in Plexflow
Option 2 – One-time amounts at specific times
Used when certain expenses are billed at specific periods (e.g. annual allocation of municipal taxes or a one-time adjustment of maintenance fees).
👉 In that case, you can manually add a collection or a unique invoice on the desired date.
👉 For the detailed information concerning this procedure, consult the article “Commercial leases - How to add a one-time amount in Plexflow”.
This article’s goal is to explain how to set up a commercial rent in Plexflow, from a technical and practical point of view.
It aims to support users in scheduling the lease inside the software, by faithfully reproducing the parameters agreed between the owner and the tenant.
To clearly understand how the system works, we cover certain essential components of commercial leases, such as the base rent, the applicable taxes, or the operating expenses.
These elements are presented only as examples, in order to illustrate the setup logic in Plexflow.
The content of this article has a strictly technical scope.
It constitutes neither a guide for drafting a commercial lease, nor a legal interpretation of the clauses of a contract.
For the drafting of the lease itself or for any legal question, it is recommended to consult a licensed professional (lawyer, notary, or legal advisor specialized in commercial law).
Updated on: 12/11/2026
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