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Five Clauses to Check Before You Sign a Commercial Lease

Five Clauses to Check Before You Sign a Commercial Lease

Most lease problems start with clauses nobody read closely. These five deserve a second look before you sign.

Eleanor Calder

Eleanor Calder, Esq.

Founder & Principal Attorney

A commercial lease is often the largest commitment a small business makes. These five clauses cause most of the disputes we see.

1. The personal guarantee

Many landlords ask owners to guarantee the lease personally. Negotiate a cap, or a clause that ends your liability once you return the keys and pay what is owed.

2. Operating expenses

Ask exactly which costs pass through to you and whether there is an annual cap. Uncapped pass-throughs are where budgets break.

3. Assignment and subletting

If you sell the business or need to downsize, you will want the right to assign or sublet without unreasonable consent requirements.

4. Repairs and maintenance

Spell out who fixes the roof, heating and plumbing. Ambiguity here turns into an argument the first winter.

5. Renewal and termination

Lock in renewal options and pricing now. Early termination rights are rare, so negotiate them before you sign, not after.

This article is general information, not legal advice for your situation. For advice on your own matter, schedule a consultation.

Eleanor Calder

Written by Eleanor Calder, Esq.

Principal attorney at Calder Law, advising individuals, families and small businesses in New York and New Jersey since 2009.

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