📖 Commercial lease glossary
Demised Premises
The demised premises are the specific space a lease grants ("demises") to the tenant — typically defined by suite number, a floor-plan exhibit, and a measured square footage. Everything economic in the lease hangs off this definition: rent is priced on it, the tenant’s pro-rata share of operating costs is calculated from it, and the repair, insurance, and alteration obligations divide at its boundary.
What the definition actually includes — and excludes
"Demise" is old legal English for a grant of an estate for a term — the lease conveys exclusive possession of a defined space for the lease term. The definition clause and its exhibit draw the boundary: which suite, measured how, including what. Walls are the classic subtlety — leases commonly demise to the interior face of exterior walls and the midline of walls shared with other tenants — and risers, ducts, columns, and common facilities passing through the space are usually excluded and reserved to the landlord.
The boundary is where obligations divide. Inside: typically the tenant’s repair, janitorial, and insurance responsibility. Outside: building systems, structure, and common areas — the landlord’s domain, recovered through CAM. When an HVAC unit serves only one suite but sits on the roof, or a pipe bursts inside a demising wall, the definition clause (plus the repair article) decides who pays.
Measurement: where the square footage comes from
- ✓Usable square feet (USF): the space inside the demising walls that the tenant actually occupies
- ✓Rentable square feet (RSF): USF plus the tenant’s allocated share of common areas (lobbies, corridors, restrooms) via a load factor — commercial rent and pro-rata shares are almost always quoted on RSF
- ✓BOMA standards govern the measurement math; a re-measurement under a newer BOMA standard can change RSF — and therefore rent and CAM shares — without moving a single wall
- ✓Watch for "stipulated" or "deemed" area clauses: many leases fix the square footage contractually and bar re-measurement, making the stated number final even if it is physically wrong
Why the demised premises definition matters in abstraction
Suite, RSF, USF, load factor, and the measurement standard are foundation fields in any lease abstract — they feed rent-per-square-foot analytics, pro-rata share calculations, and the unit records in Yardi or MRI. An abstract that captures 4,850 RSF when the second amendment expanded the premises to 6,200 RSF corrupts everything downstream: the rent roll, the CAM allocation, the stacking plan.
Expansions, contractions, relocations, and storage or licensed areas are the usual complications — each arrives in an amendment that redefines the demised premises, and each is a place where single-document AI extraction quietly fails. We assemble the full document package first, abstract the current premises definition, and cite the controlling page.
Frequently asked questions
What does "demise" mean in a lease?
To demise is to grant exclusive possession of property for a term — it is the operative verb of a lease. "Landlord demises to Tenant the premises described in Exhibit A" is the sentence that makes the document a lease rather than a license; a license grants permission to use, not exclusive possession.
What is the difference between demised premises and the building?
The demised premises are the tenant’s exclusive space; the building includes common areas, other tenants’ premises, structure, and systems, all retained by the landlord. The ratio between the two — the tenant’s RSF over the building’s total RSF — is the pro-rata share that drives CAM, tax, and insurance recoveries.
Do demised premises include the walls, roof, or parking?
Usually not the structure: leases commonly demise to the interior face of exterior walls, exclude the roof and foundations, and reserve building systems passing through the space. Parking is typically a separate appurtenant right — reserved stalls or a ratio — granted alongside, not inside, the demised premises. The exhibit and definition clause control.
Can the demised premises change during the lease term?
Yes — expansion, contraction, relocation, and must-take clauses all alter the premises mid-term, normally via amendment with a new exhibit and adjusted rent and pro-rata share. That is why abstraction has to reflect the current controlling documents, not just the original signature copy.
Abstracting leases with demised premises terms?
Our specialists capture this clause — and every other one — with page citations and human QA sign-off. See Yardi Lease Abstraction Services.
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