Whether you're opening your first location or expanding into a new space, a commercial lease is one of the most significant commitments your business will make. Unlike residential leases, commercial terms are heavily negotiable—and what you don't ask about upfront can cost you later.
This resource outlines key questions to consider before signing. It's not a substitute for legal review, but it can help you know what to look for and what to discuss with your attorney.
About the Space and Building
What is the exact square footage, and how is it measured?
Commercial landlords often use different measurement standards (such as usable versus rentable square footage), which can significantly affect your actual costs per square foot.
What condition will the space be delivered in?
Will it be a cold shell, or will basic improvements like flooring, ceilings, and HVAC already be in place?
Are there any existing conditions, code violations, or deferred maintenance issues?
Understanding what you're inheriting helps you plan and negotiate.
What are the building's hours of operation, and is after-hours access available?
Some buildings restrict HVAC or elevator access outside standard business hours.
About the Costs
What is included in the base rent, and what costs are passed through separately?
Common area maintenance (CAM), property taxes, insurance, and utilities are often charged on top of base rent in what's called a triple-net (NNN) structure.
How are CAM charges calculated, and are they capped?
Without a cap, your occupancy costs can rise unpredictably year over year.
Is there a tenant improvement allowance, and what are the conditions for receiving it?
Some allowances are paid upfront, others as reimbursement, and some are amortized into your rent.
What happens if construction or buildout costs exceed the allowance?
Knowing who bears that risk matters before you start planning improvements.
Are there any additional fees—such as marketing fees, association dues, or administrative charges?
About the Lease Term
What is the initial term, and are there renewal options?
If renewal options exist, how is the rent determined at renewal—fair market value, a fixed increase, or CPI adjustment?
Is there an early termination clause, and under what conditions can it be exercised?
Businesses change, and flexibility has value.
What are the penalties for breaking the lease early if no termination clause exists?
When does the lease term actually begin—at signing, at delivery of the space, or at rent commencement?
These can be different dates, especially if buildout is involved.
About Permitted Use and Exclusivity
Does the lease clearly permit your intended use of the space?
Permitted use clauses can be narrow, and landlords in multi-tenant buildings may have restrictions.
Are there any exclusive use provisions that benefit or restrict you?
In retail settings, exclusivity clauses can protect you from direct competition in the same property—or limit what you can offer if another tenant holds that right.
Can you assign the lease or sublease the space if your business needs change?
About Maintenance and Repairs
Who is responsible for maintaining and repairing HVAC, plumbing, electrical, and structural systems?
What happens if a major system fails—who pays, and how quickly must repairs be made?
Are you required to return the space to its original condition at the end of the lease?
About Default and Disputes
What constitutes a default under the lease, and what cure periods are provided?
What remedies does the landlord have if you default—and are there limits on landlord acceleration of rent or recovery of damages?
Does the lease require mediation or arbitration before litigation?
Which state's law governs the lease, and where must disputes be resolved?
About Future Changes
Does the landlord have the right to relocate you to a different space in the building?
What happens if the building is sold—does your lease transfer, and are the terms protected?
Are there any planned renovations, constructions, or changes to the property that could affect your business operations?
A Note on Review
Commercial leases are negotiable, and the initial draft almost always favors the landlord. Many of these questions will surface issues that can be addressed through negotiation before you sign.
Having an attorney review your lease before signing is one of the most cost-effective investments you can make in a new location. A careful review often pays for itself many times over by catching issues that would otherwise become expensive problems.
This resource is provided for general informational purposes only and does not constitute legal advice. Every situation is unique, and commercial leases vary widely. If you have questions about a specific lease or location, please consult a qualified attorney.
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