Reviewing a Commercial Lease

Unlike a home rental, a commercial lease is heavily negotiable - and the standard draft a landlord hands you is written to favour the landlord. The headline rent is only part of the story; the clauses around it decide how much the space really costs and how easily you can leave. Reading carefully before you sign is one of the highest-value hours a business owner can spend.

The money terms

Look past the base rent to what you'll actually pay over the term:

• Rent escalations - how and how often the rent rises
• Additional costs - service charges, maintenance, insurance, and taxes passed to you
• Deposit and guarantees - what's held, and whether you're personally on the hook
• Fit-out and improvements - who pays, and who owns them at the end

Flexibility and exits

Businesses change; make sure the lease can bend without breaking you:

• Term and renewal - length, renewal options, and how notice works
• Assignment and subletting - can you transfer the space if plans change?
• Break clauses - is there an early-exit right, and what does it cost?
• Repair obligations - the condition you must return the space in

Before you commit

Read the whole document, list the terms you'd like changed, and price the worst-case scenario, not just the best. Because lease law and market norms vary by location, a review before signing often pays for itself many times over.