Commercial Lease Checklist: What to Review Before You Sign

In a commercial lease, the protections a residential tenant takes for granted are not supplied by statute — they exist only if they are written into the document. That is why the same lease can carry a personal guaranty on your home, uncapped pass-throughs, a holdover multiplier, and a restoration bill at the end, all without changing the rent number on page one. This checklist walks the five groups of terms that decide your exposure, so the expensive ones do not slip past on a signing deadline.

This is an observational checklist. Each item names what to find in your lease and why it matters — it does not tell you what to decide. Confirm what your document actually says for each point, and treat any protection that is simply absent as information about where your exposure sits. The legal judgment about what to do with what you find is yours.

1. The Money Terms

The headline rent is rarely the whole cost. These items are where the real number hides.

• Base rent and lease structure. Confirm whether the lease is gross (most operating costs included) or net. In a net or triple-net (NNN) lease you pay a share of taxes, insurance, and maintenance on top of base rent.
• Rent escalation. Find the annual increase — a fixed percentage, a CPI tie, or a stepped schedule — and note that it compounds over the term.
• CAM and operating-expense pass-throughs. Confirm your pro-rata share and whether annual increases are capped. CAM with no cap, vague inclusions, or administrative fees stacked on top is one of the most common sources of surprise commercial bills. The CAM charges calculator estimates the range.
• Security deposit or letter of credit. Confirm the amount, the conditions for return, and any burn-down. Commercial deposits are not capped or timed by statute the way residential deposits are.

2. The Personal-Liability Terms

This group decides whose assets are on the line. For most small-business tenants it is the most consequential section in the document.

• Personal guaranty. Confirm whether you are personally guaranteeing the lease, and whether the guaranty is unlimited or capped. An unlimited personal guaranty puts your own assets behind the entire remaining lease value; negotiated leases commonly include a dollar cap, a time limit, a rolling cap, or a burn-off schedule. The personal guaranty calculator sizes the exposure.
• Good guy clause. In markets where it is common, find whether a good guy guaranty lets personal liability end on proper surrender of the space, even before the term expires.
• Indemnification. Find who indemnifies whom and whether it is mutual. A one-way indemnity can make you responsible for claims you did not cause.
• Insurance and consequential damages. Confirm the required coverage types and limits, and whether the guaranty extends to the landlord's consequential or indirect damages such as lost profits.

3. The Exit Terms

Leaving a commercial lease is harder and costlier than entering one. These terms set the price of leaving, planned or not.

• Term and the real end date. Confirm the length and exactly when it expires — the end date drives the holdover, renewal, and notice clocks.
• Early termination. Find whether you can break the lease at all and at what cost. Many commercial leases are silent here, meaning there is no right to leave early. The early termination calculator estimates the exposure.
• Holdover rent. Confirm what happens if you stay past the end date. Holdover provisions commonly reset rent to 150–200%. The holdover risk calculator shows the impact.
• Renewal options and assignment. Find the renewal terms and notice deadline, and whether you can assign or sublet if your plans change. Landlord-consent restrictions on assignment limit your exit options.

4. The Maintenance and Restoration Terms

Who fixes what, and what condition you return the space in, can rival rent as a cost line.

• Repair and maintenance obligations. Confirm which building systems you maintain. HVAC in particular is often pushed to the tenant, and a rooftop unit can be a five-figure line.
• Restoration and surrender condition. Find the condition the lease requires the space to be returned in. A restoration clause requiring removal of your build-out at lease end is a cost most tenants never price in. The restoration cost estimator gives a range.
• Tenant improvements and ownership. Confirm what improvements you may make, what approvals you need, and who owns them at the end of the term.

5. The Dispute Terms

Nobody reads these until there is a dispute — which is exactly when they decide the outcome.

• Attorney fees. Confirm whether fee-shifting is one-way (landlord only) or mutual. A one-way clause can leave you paying the landlord's legal bill.
• Jury trial waiver and arbitration. Find whether you are waiving a jury trial or agreeing to arbitration, which changes how, and how expensively, a future dispute is resolved.
• Default, cure periods, and landlord mitigation. Confirm how default is defined, how long you have to cure, and whether the landlord must make reasonable efforts to re-let after a default rather than leaving the space empty and billing you.
• Governing law and venue. Find which state's law applies and where disputes are heard — it is not always where the property sits.

Frequently Asked Questions

What should I check in a commercial lease before signing?

Work through five groups of terms: the money terms (base rent, escalation, and CAM/NNN pass-throughs), the personal-liability terms (personal guaranty scope, indemnification, and insurance), the exit terms (length, early termination, holdover, renewal, and assignment), the maintenance terms (repair obligations and restoration or surrender condition), and the dispute terms (attorney fees, jury or arbitration clauses, default, and cure periods). The terms that produce the largest surprise costs are the personal guaranty, uncapped pass-throughs, holdover rent, and restoration obligations — none of which appear in the headline rent figure.

What makes a commercial lease riskier than a residential one?

Residential leases are constrained by state landlord-tenant statutes that cap deposits, require habitability, and limit some fees. Commercial leases are largely a matter of negotiation, so the protections a tenant relies on must be written into the document rather than supplied by statute. That is why commercial leases routinely carry personal guaranties, CAM and NNN pass-throughs, restoration obligations, and holdover multipliers that have no residential equivalent.

What is the single most expensive clause to miss?

For most small-business tenants it is the personal guaranty. An unlimited guaranty puts your home, savings, and personal assets behind the entire remaining value of the lease if the business cannot pay. Negotiated leases commonly cap the guaranty by dollar amount, by time, or with a burn-off schedule, but the landlord's first draft is usually unlimited.

Are commercial lease terms negotiable?

A landlord's first draft is a starting position, not a final one. The terms most commonly adjusted in negotiated leases include guaranty caps and burn-off provisions, annual caps on CAM and operating-expense increases, landlord re-letting (mitigation) obligations, and cure periods before default. Whether a given landlord will move depends on the market and the tenant's leverage.

Should a commercial lease be reviewed by an attorney?

Commercial leases carrying personal guaranties or high dollar exposure are commonly reviewed by counsel before signing, and a checklist like this one helps identify which terms warrant that review. A checklist and an automated scan can tell you where the exposure sits; the legal judgment about what to do with that information is yours.

Related reading: the personal guaranty explained, triple-net (NNN) leases, the landlord-tenant power imbalance, and the full exposure calculator. For a clause-by-clause commercial analysis, see LiabilityScore's commercial lease scoring.