Contract review guide
Commercial Lease Agreement review: what to check before you sign
Commercial leases are long, one-sided, and written by the landlord's lawyers. Unlike residential leases, there is little consumer protection — what you sign is what you get.
Typical signers: small businesses, agencies, and startups renting office or retail space.
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Analyze my commercial lease →The 5 most common Commercial lease red flags
1. Triple-net surprises
Base rent is only the start: taxes, insurance, and maintenance (NNN) can add 30-50%. Demand historical operating-cost statements.
2. Personal guarantees
A personal guarantee puts your house behind your office. Negotiate a cap, a burn-off after X months of good payment, or a security deposit instead.
3. Broad repair obligations
'Tenant maintains the premises' can include the roof and HVAC replacement. Structural elements should stay with the landlord.
4. No assignment or subletting rights
If you outgrow (or shrink out of) the space, an assignment clause is your only exit. 'Consent not to be unreasonably withheld' is the key phrase.
5. Relocation and demolition clauses
Some leases let the landlord move you or terminate for redevelopment. Understand the compensation, or strike the clause.
Pre-signing checklist
- Total occupancy cost (base + NNN + utilities) modeled, not just base rent?
- Personal guarantee capped or burning off over time?
- Repair split: structure and systems to landlord, interior to tenant?
- Assignment/sublet permitted with reasonable consent?
- Renewal option with defined rent formula?
Frequently asked questions
What does triple-net (NNN) mean?
The tenant pays, on top of base rent, a pro-rata share of property taxes, building insurance, and common-area maintenance. Always ask for prior-year statements to size it.
Can I avoid a personal guarantee?
Sometimes — with a larger deposit, a letter of credit, or a 'good guy' guarantee limited to the period until you hand back the keys. Any cap is better than an unlimited guarantee.
What is a fair lease term for a startup?
Shorter is safer: 1-3 years with renewal options preserves flexibility. Landlords trade shorter terms for slightly higher rent — usually worth it.
Review other contract types
This guide is general information, not legal advice. Laws differ per jurisdiction — for high-stakes contracts, consult a qualified lawyer.
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