Signing a commercial lease can feel overwhelming. Whether you are launching a new business, expanding to a new location, or relocating operations, the pressure to secure space quickly can make it easy to overlook important details. Unfortunately, mistakes in a commercial lease can lead to unexpected costs, operational restrictions, and long-term legal disputes.
Commercial leases are complex contracts, and they are often drafted to protect the landlord’s interests. Understanding common pitfalls before signing can help you protect your business, manage risk, and avoid costly surprises down the road.
Take Time to Review the Entire Lease
One of the most common mistakes tenants make is rushing through the lease review process. Commercial leases are often lengthy and filled with legal language that may seem routine but can carry serious consequences. Problems often arise when key terms are vague or undefined, important provisions are buried in fine print, or verbal promises are not included in the written agreement. Remember, only the written lease controls your rights and obligations. If a term is important to you, it should be clearly stated in the contract before you sign.
Understand All Costs Beyond Base Rent
Focusing only on monthly rent can be misleading, as additional charges can significantly increase the total cost of occupying a commercial space.
- Common area maintenance (CAM) fees: Charges for shared building spaces and services.
- Property taxes and insurance: Tenant obligations that can vary by lease and location.
- Utilities and shared services: Costs for electricity, water, HVAC, and other building services.
- Annual rent increases or escalation clauses: Scheduled or formula-based increases over time.
- Late fees and default penalties: Additional charges if payments are missed or obligations are unmet.
Understanding all costs and how they may change over time helps prevent unexpected financial strain and keeps your lease manageable.
Clarify Maintenance and Repair Obligations
Maintenance and repair responsibilities are a frequent source of disputes in commercial leasing, and some leases place extensive obligations on tenants, including responsibility for major systems. Before signing, make sure the lease clearly specifies who handles HVAC, plumbing, and electrical repairs, outlines responsibility for structural components such as the roof, and distinguishes between routine maintenance and major repairs. Clear language on these issues can help prevent disagreements and avoid unexpected expenses during the lease term.
Renewal, Exit, and Financial Risks
Commercial leases often last several years, and failing to understand your obligations can create serious risks.
- Renewal options and notice deadlines: Know how and when you can extend your lease to maintain flexibility.
- Early termination rights: Identify whether you can exit the lease early and under what conditions.
- Subleasing or assignment restrictions: Understand limits on transferring or sharing your leased space.
- Personal liability: Be aware of obligations that may make you personally responsible for unpaid rent or damages.
- Default clauses and ongoing obligations: Review timelines for curing defaults and any continuing responsibilities after leaving the property.
Reviewing these terms ahead of time helps protect your business, avoid costly mistakes, and ensure you can adapt if circumstances change.
Protect Your Business Before You Sign
A commercial lease can shape your business’s future for years to come, and once signed, its terms are difficult to renegotiate. A legal review can identify unfavorable provisions, clarify responsibilities, and reduce the risk of disputes. An experienced attorney can also help negotiate terms that align with your business goals, financial position, and long-term plans. Taking these steps ensures you avoid costly mistakes and protect your investment.
If you are negotiating a lease or facing a lease-related dispute, contact Sprigg-Novak Law Firm, PLLC at (903) 310-1312 to discuss your situation and safeguard your interests.