There is no specific "legal" way other than what you define in the lease agreement. However there are several different approaches. The three most common are Triple Net (NNN), Modified Gross (MG) and Gross. Sometimes the nature of the property will determine the method. For example, in a multi-tenant building, all expenses might be quoted in a gross rent, because the suites are not individually metered and space requirements vary from tenant to tenant. There is usually a "base Year" limitation.
On the other hand, a retail space might be quote on a NNN basis where the the tenant pays a base rent plus all expenses. This "pass through amount" is usually calculated on as prorata sf basis, and will generally vary from year to year based on the actual expenses of the Landlord.
There are other ways to determine rent, including the percentage rent method mentioned by Patrick K. Sometimes there can even be a combination such as NNN with a percentage kicker. Get yourself a competent broker and/or attorney to review lease before entering into one.
Below is an interest CCIM article re how different methods of rent calculation can make a big difference.
Apr 25, 2013