Definitions of the terms that come up in commercial and retail property operations: insurance certificates and endorsements, lease clauses, compliance, and the technology around them. Each entry starts with a one-sentence definition, then the longer version, then the articles where the term does real work.
- ACORD 25
- The ACORD 25 is the standard one-page certificate of liability insurance used in the United States. A broker issues it to summarize a policyholder's liability coverages: general liability, auto, umbrella, workers compensation, and others. It is informational only and grants the certificate holder no rights under the policy.
- ACORD 27
- The ACORD 27 is the evidence of property insurance form. It confirms that a policy covers a specific location or item of property, names the interested party (a lender, lessor, or landlord), and states the coverage and limits. Its commercial counterpart with more detail is the ACORD 28.
- additional insured
- An additional insured is a person or organization added to another party's liability policy by endorsement, so that the policy defends and pays claims against them arising from the named insured's work or premises. Landlords require it from tenants and vendors so that a claim caused by the tenant or vendor is handled by that party's insurer first.
- business interruption insurance
- Business interruption insurance, also called business income coverage, replaces the income a business loses and the extra expenses it incurs while its premises are unusable after a covered property loss such as a fire. It is usually part of a commercial property policy and pays for a defined restoration period.
- CAM charges
- CAM charges (common area maintenance) are the tenant's share of the landlord's cost to operate and maintain the shared parts of a property: parking, lobbies, corridors, landscaping, snow removal, security, and common utilities. Tenants pay monthly estimates and the landlord reconciles them against actual costs after year end.
- certificate of insurance
- A certificate of insurance (COI) is a one-page document, usually on an ACORD 25 form, that summarizes the insurance a vendor or tenant carries: insurer, policy numbers, coverage types, limits, and dates. It is evidence that a policy existed when the certificate was issued, not a contract and not a guarantee of coverage.
- claims-made vs. occurrence
- An occurrence policy covers incidents that happen during the policy period, no matter when the claim is filed. A claims-made policy covers claims filed while the policy is in force, for incidents after its retroactive date. General liability is usually occurrence; professional, pollution, and management liability are usually claims-made.
- CMMS
- A CMMS (computerized maintenance management system) is software that organizes maintenance: an asset register, preventive maintenance schedules, work orders, parts and inventory, technician assignments, and maintenance history. It is built for the engineering team and the equipment. Tenant-facing request platforms sit beside it, taking requests from occupants and routing them to the people the CMMS schedules.
- commercial general liability
- Commercial general liability (CGL) insurance covers a business against third-party claims for bodily injury, property damage, and personal and advertising injury arising from its premises, operations, products, and completed work. It is the coverage every commercial lease and vendor contract requires first, usually on an occurrence form with stated limits.
- escalation clause
- An escalation clause is the lease provision that raises rent over the term. The common forms are fixed steps (a stated amount or percentage on each anniversary), index-linked increases tied to CPI, and operating cost escalations that pass increases in taxes, insurance, and maintenance to the tenant. Most leases combine a base rent escalation with an expense pass-through.
- gross lease
- A gross lease charges the tenant one rent figure that covers the space and the landlord's operating costs: taxes, insurance, maintenance, and often utilities and janitorial. The landlord pays the costs from the rent and carries the risk that they rise. Most office gross leases add a base year clause that passes increases above the first year to the tenant.
- hold harmless agreement
- A hold harmless agreement, also called an indemnification clause, is a contract provision in which one party (the indemnitor, usually a tenant or vendor) agrees to assume liability for specified claims and to defend and reimburse the other party (the indemnitee, usually the owner or manager). Insurance requirements exist to make sure the promise can be paid.
- modified gross lease
- A modified gross lease sits between a gross lease and a triple net lease. The tenant pays base rent and some operating costs, either specific categories such as utilities and janitorial, or its share of costs above a base year or expense stop, while the landlord pays the rest. The exact split is negotiated and written into the lease.
- percentage rent
- Percentage rent is additional rent in a retail lease, paid as a percentage of the tenant's gross sales above an agreed threshold called the breakpoint. A tenant with a 6% rate and a $2,000,000 breakpoint who sells $2,500,000 pays 6% of the $500,000 excess, or $30,000, on top of base rent.
- pro rata share
- A tenant's pro rata share is the fraction of a property's shared costs it pays: the tenant's rentable area divided by the property's rentable area. A 10,000 square foot tenant in a 200,000 square foot building has a 5% share. The lease decides the denominator, gross-up, and which costs apply.
- proptech
- Proptech, short for property technology, is the application of software, data, and connected hardware to real estate: how it is financed, bought and sold, designed and built, leased, and operated. For commercial property operators the relevant slice is the tools that run buildings day to day, from systems of record to tenant apps to AI operators.
- rent abatement
- Rent abatement is a period during which the tenant's rent is reduced or waived. As a concession it is the free rent offered to win a lease, usually months at the start of the term. As a remedy it stops or reduces rent while the premises are unusable through casualty, landlord default, or loss of services.
- rent roll
- A rent roll is a schedule of every lease in a property, one line per tenant or suite, showing tenant, area, current rent and schedule, start and end dates, security deposit, options, and often recoveries and abatements. It is generated from the property management system and is the first document a lender or buyer requests.
- service level agreement
- A service level agreement (SLA) is a commitment, usually part of a contract, that defines measurable targets for a service, how they are measured and reported, and the remedy when they are missed. In property operations a useful SLA covers outcomes such as tenant response times, certificate compliance rates, and deadline hit rates, not only software uptime.
- SNDA
- An SNDA (subordination, non-disturbance, and attornment agreement) is a three-party agreement among tenant, landlord, and lender. The tenant subordinates its lease to the mortgage; the lender agrees not to disturb a tenant in good standing after foreclosure; and the tenant agrees to recognize the lender or a purchaser as its new landlord.
- triple net lease
- A triple net lease (NNN) is a commercial lease in which the tenant pays base rent plus its share of the three "nets": property taxes, building insurance, and common area maintenance. The landlord receives rent largely free of operating cost. Single and double net leases pass through fewer categories; an absolute net lease passes through everything, including structure and roof.
- umbrella insurance
- An umbrella policy provides liability limits above the underlying general liability, auto liability, and employers liability policies, paying once those limits are exhausted. Businesses use it to meet the higher limits that leases and contracts require, such as $5,000,000, without rewriting each underlying policy. It has its own row on the ACORD 25.
- vendor compliance
- Vendor compliance is the practice of confirming that every contractor or service provider working in a commercial building meets the owner's requirements: insurance at the required limits with the right endorsements, trade licences, tax forms, safety documentation, and contract terms. It covers both the check before the first work order and the renewals afterward.
- waiver of subrogation
- A waiver of subrogation is an agreement, backed by a policy endorsement, in which an insured gives up its insurer's right to recover a paid claim from a third party such as a landlord or contractor. Commercial leases usually require mutual waivers so an insured loss stays with the insurer instead of becoming a lawsuit between the parties.
- work order
- A work order is the record that authorizes and tracks a task in a building: what needs doing, where, for whom, at what priority, assigned to which engineer or vendor, with status from open to closed. In commercial property it usually begins as a tenant request and ends as a completed, sometimes billable, job.