Commercial Lease Checklist: 30 Points to Review Before Signing

Rent and Financial Terms (Points 1–8)

1. Base rent: Confirm the exact amount, payment date, and acceptable payment methods. 2. Rent escalation: Understand the formula, frequency, and any caps or floors. Calculate total rent for the full term. 3. CAM charges: Understand what's included, your estimated share, and the reconciliation process. 4. CAM caps: Confirm any annual cap on controllable CAM increases (push for 3-5%). 5. CAM exclusions: Review the list of costs excluded from CAM — negotiate additions if missing. 6. Operating expenses: If not a gross lease, identify all additional operating expense pass-throughs. 7. Security deposit: Amount, holding requirements, deduction standards, and return timeline. 8. Free rent: Document any free rent period and confirm it's in the lease, not just verbal.

Lease Structure and Term (Points 9–14)

9. Lease type: Confirm whether gross, net, modified gross, or triple-net — this determines your total financial exposure. 10. Lease term: Exact commencement and expiration dates, and what happens if construction delays the commencement. 11. Commencement conditions: If rent starts upon 'substantial completion' of build-out, define what that means. 12. Renewal options: Terms, notice periods, rent formula for renewal periods, and deadlines to exercise. 13. Expansion rights: Any right of first refusal or first offer on adjacent space. 14. Automatic renewal: Whether failure to give notice auto-renews the lease and for what term.

Calculating Your True Total Cost

For any commercial lease, build a financial model: Year 1 through Year N showing base rent + estimated operating expenses + CAM + any additional fees. This total cost analysis is the only way to accurately compare competing lease offers and understand your full financial commitment.

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Rights and Obligations (Points 15–22)

15. Permitted use: Confirm the use clause is broad enough to cover your current and anticipated business operations. 16. Exclusivity: For retail tenants, whether the landlord will restrict competing tenants in the same center. 17. Signage: Your rights to exterior and interior signage, approval process, and cost responsibility. 18. Maintenance: Who is responsible for what — HVAC, plumbing, electrical, roof, parking lot. 19. HVAC responsibility: Specifically whether you handle routine maintenance only or replacement costs as well. 20. Alterations: Your right to make improvements, approval requirements, and restoration obligations at lease end. 21. Landlord entry: Required notice period and permitted reasons for entry. 22. Insurance: Required coverage types and amounts — confirm your broker can meet these requirements affordably.

Exit and Flexibility Provisions (Points 23–27)

23. Early termination right: Whether you have a defined right to terminate early, the notice period, and the penalty. 24. Subletting rights: Whether permitted, landlord consent standard, and any profit-sharing requirements. 25. Assignment rights: Whether you can assign the lease upon business sale, and under what consent standard. 26. Change of control: Whether a business sale triggers assignment provisions even without formal assignment. 27. Default and cure: The grace periods you have to cure a monetary default (typically 3-5 days) and non-monetary default (typically 10-30 days) before the landlord can declare breach.

Liability and Risk (Points 28–30)

28. Personal guarantee: Whether required, the scope of personal liability, any caps or good-guy provisions, and burn-down terms. 29. Indemnification: Whether you're indemnifying the landlord for claims beyond your own actions — broad indemnification provisions can create unexpected liability. 30. Force majeure: Whether business interruptions (pandemics, natural disasters) excuse rent obligations or trigger other lease provisions — this became critical during COVID-19 and remains an important review point.

Using This Checklist

Work through this checklist before signing any commercial lease. For each point, note the current lease language, your concerns, and what you'd like changed. Then prioritize: identify your top 5-8 items and focus negotiation energy there. Use an AI lease review tool like SaferLease to analyze the full lease and identify additional provisions that may be outside market standard. For high-value leases — particularly those with personal guarantees, terms exceeding 5 years, or rent above $100,000 annually — consider supplementing your review with a commercial real estate attorney. SaferLease can help you identify the items that most warrant professional attention.