Commercial Leases in Markham: A Tenant's Checklist for TMI and Additional Rent
Neeraj Moolchandani is a top real estate agent in Markham, Ontario. Published November 13, 2026 · By Neeraj Moolchandani, REALTOR®, Cofounder of the Kaizen Real Estate Team, eXp Realty, Brokerage
The short answer
In a net lease, you pay base rent plus your share of the building's taxes, maintenance and insurance, often called TMI or additional rent. Base rent is fixed in the lease, but TMI can change every year. Before you sign an offer to lease, ask for at least three years of TMI history, find out exactly what costs can be passed through, and negotiate limits such as a cap on increases and exclusions for major structural replacements. Have a commercial real estate lawyer review the lease.
Many Markham business owners focus on base rent and are surprised by additional rent later. Our Kaizen Real Estate Team is one of the teams Markham business owners call when weighing a big property decision. Our post on buying vs leasing a commercial condo covers whether to own; this checklist is for when leasing is the right call.
Comparing two spaces with different TMI? Ask Neeraj to help you line them up.
Call (647) 370 8885Lease Types in Plain Words
The Business Development Bank of Canada describes several common lease types.
| Lease type | What you pay |
|---|---|
| Gross lease | One amount that covers base rent and all incidental costs |
| Modified gross | Base rent, with some costs shared |
| Net lease | Base rent plus usually one cost, often property tax |
| Double net | Base rent plus two costs, such as tax and insurance |
| Triple net | Base rent plus tax, insurance, utilities and operating costs; the landlord covers structural repairs |
| Percentage rent | Base rent plus a share of sales over a set level, common in malls |
Source: BDC, 13 terms to understand before signing a commercial lease
What Goes Into TMI
- Taxes: your share of the property's commercial tax bill.
- Maintenance: common area cleaning, landscaping, snow removal, parking lot upkeep and repairs.
- Insurance: the landlord's building insurance.
- Management fee: often a percentage of costs, charged by the landlord or manager.
- Capital items: some leases allow roof, paving or equipment replacements to be charged back over time.
Wondering whether to lease or buy? Talk it through with Neeraj.
Call (647) 370 8885Your share is usually based on your unit's area compared with the total leasable area. Check how that area is measured.
Ask These Questions Before You Sign
- What was TMI per square foot for each of the last three years?
- What is the current year's estimate, and how is the year end adjustment handled?
- Which costs are included, and which are excluded?
- Can major structural repairs or replacements be charged to tenants?
- What management or administration fee is added, and on what base?
- Do I have the right to review or audit the landlord's records?
Want a referral to a commercial real estate lawyer? Ask Neeraj.
Call (647) 370 8885Terms Worth Negotiating
- A cap on controllable costs: a limit on how much certain costs can rise each year.
- Exclusions: structural repairs, roof replacement, costs of the landlord's financing, and leasing commissions for other tenants.
- Audit rights: the right to review statements and get refunds for errors.
- Tenant improvement allowance: money from the landlord toward your fit out, often per square foot.
- Rent free or reduced periods: time to build out before full rent starts.
- Renewal options: the right to stay, with the rent formula set in advance.
Leasehold Improvements and Leaving
BDC notes that improvements attached to the building usually become the landlord's property unless the lease says otherwise, while trade fixtures such as furniture and equipment can generally be removed. Check what you must restore when you leave, and whether you can assign the lease or sublet if your business changes. Our guide on buying a retail condo unit covers ownership in Markham's condo malls.
Budget the Whole Occupancy Cost
Add base rent, TMI, utilities you pay directly, your own insurance, fit out costs and any HST to get your true monthly cost. Compare spaces on that full number. A lower base rent with high TMI can cost more than a higher base rent in a well run building. Our post on choosing your lawyer and other professionals explains who to bring in.
Have a question about a lease you are reviewing? Call Neeraj.
Call (647) 370 8885Questions Markham Clients Ask
What is TMI in a commercial lease?
TMI stands for taxes, maintenance and insurance. In a net lease, tenants pay their share of these costs as additional rent on top of base rent.
What is a triple net lease?
A lease where the tenant pays base rent plus property tax, building insurance, utilities and operating costs, while the landlord covers structural repairs.
Can I cap TMI increases?
Often you can negotiate a cap on increases in controllable costs, though taxes and insurance are usually excluded from the cap.
Should roof replacement be part of TMI?
Many tenants negotiate to exclude major structural replacements, or to have them spread over their useful life. Read the lease carefully.
Do I need a lawyer for a commercial lease?
Yes. A commercial real estate lawyer should review the offer to lease and the lease before you sign.
Keep Reading
Helpful Pages
Sign a Lease You Fully Understand
Neeraj will help you think through leasing versus buying and connect you with the right professionals before you commit.
Sources: BDC, 13 terms you need to understand before signing your commercial real estate lease; BDC, How to negotiate a commercial lease effectively.
Neeraj Moolchandani, REALTOR®, Kaizen Real Estate Team, eXp Realty, Brokerage, 9763 Markham Rd, Markham, ON L6E 1A4. (647) 370 8885 · info@kaizenrealestate.ca. Published November 13, 2026. General information only, not legal, tax, financial or engineering advice. Rules and programs change, so confirm details with the official source and your own professionals before you act. Not intended to solicit properties currently under contract.
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