USA – ALABAMA Law and Practice Contributed by: Adam J. Sigman, Crystal H. Walls, Nathan Stotser, Katie Sinclair and Courtney Bradshaw, Dentons
costs, advertising, etc; such pass-through items will vary based on the terms negotiated by the parties. In a gross lease, a landlord charges its tenant one flat fee for rent, and the landlord is responsible for the property’s maintenance costs; however, such maintenance costs are typically accounted for in the amount of the gross lease’s base rent. Furthermore, certain categories of commercial leases often contain specialised terms that are unique to the subject matter involved. 6.3 Regulation of Rents or Lease Terms There are no restrictions on the type or amount of rent charged under a commercial lease in Ala - bama. A lease term may not be longer than 99 years (Section 35-4-6). If any portion of a lease term is longer than 20 years, the lease or a lease memorandum must be recorded within one year of signing; otherwise, the portion of the term exceeding 20 years is invalid (Section 35-4-6). Residential leases are generally more regulated than commercial leases and are subject to the Alabama Uniform Residential Landlord and Ten - Lease terms range from less than one year up to 99 years, depending on the terms of a specific lease. Landlords typically maintain structural compo - nents of leased real estate, while tenants are often required to maintain the leased prem - ises and those systems and improvements serving the leased premises in good working order, although the extent of such maintenance responsibilities varies widely. ant Act (Section 35-9A-101 et seq). 6.4 Typical Terms of a Lease
Monthly rent payments are typical, but the par - ties may agree to different terms. 6.5 Rent Variation The rent payable may vary between different payment periods during the term, based on the lease’s terms, typically increasing as time pass - es during the term. 6.6 Determination of New Rent Changes and increases in rent will be deter - mined by the terms negotiated by the parties in the lease. 6.7 Payment of VAT There is typically no governmental tax collected on rent paid to a landlord. However, transfer taxes are due when a lease (or memorandum of lease) is recorded in the public records in an amount equal to the tax consideration. See 6.20 Registration Requirements . 6.8 Costs Payable by a Tenant at the Start of a Lease Costs paid by a tenant at the start of a lease vary by transaction and the parties’ negotiation. Tenants may pay the first month’s rent, a security deposit, broker’s fees or other landlord adminis - trative fees at the start of a lease. 6.9 Payment of Maintenance and Repair Net commercial leases often pass operating expenses (including common area maintenance and repair) through to the tenant, in accordance with the lease’s terms, typically prorated among the tenants of a specific property based on the amount of square footage leased by each ten - ant at said property. Gross commercial leases typically require the landlord to pay for common area maintenance and repair, though these costs are also typically priced into the rent paid by the tenant.
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