Commercial leases can look deceptively straightforward: a rent amount, a term length, and a signature page. But the real story lives in the details—definitions, addenda, exhibits, and those “standard” clauses that quietly shift risk from landlord to tenant. If you’re signing for a storefront, office, clinic, warehouse, or flexible industrial space, knowing how to read the lease (not just skim it) can save you from surprise bills, operational restrictions, and expensive disputes later.

This guide walks through the clauses tenants most often miss, how to spot them, and what to ask for before you commit. It’s written for real people running real businesses—so you’ll see practical examples, negotiation tips, and a few “watch-outs” that can keep your lease from becoming the thing that derails your growth.

One quick note: commercial leasing norms vary by market and property type. If you’re comparing properties and want a sense of what’s typical in a specific area, it can help to look up the landlord, property manager, or leasing office and visit them here to see reviews and contact info. It’s not a substitute for legal review, but it can give you context about responsiveness and how issues are handled in practice.

Start with the “business deal,” then hunt for where it’s changed

Most leases begin with a summary or “basic lease terms” section: premises, term, base rent, security deposit, permitted use, and sometimes a quick note about operating expenses. Tenants often treat this as the whole deal—especially when it matches what the broker discussed. The problem is that the summary can be overridden by later sections, exhibits, or defined terms.

When you read a lease, think like a detective. Highlight every place the lease says “except as otherwise provided,” “subject to,” “as determined by landlord,” or “in landlord’s reasonable discretion.” Those phrases are where the business deal can quietly shift. Then cross-check: if the summary says “tenant may renew,” find the renewal clause and see what conditions apply. If the summary says “tenant responsible for utilities,” find the utilities clause and see whether that includes HVAC after-hours charges, common area electricity, or submetering fees.

A helpful technique is to make a one-page “deal sheet” as you read: rent schedule, escalations, extra charges, repair responsibilities, insurance, and all deadlines (notice periods, cure periods, renewal windows). You’ll use this sheet later when you’re negotiating and when you’re operating—because the lease is not just a legal document; it’s an operating manual for your space.

Definitions: the hidden levers that control your costs and obligations

Commercial leases love defined terms: “Operating Expenses,” “Common Areas,” “Building Systems,” “Capital Expenditures,” “Gross Sales,” “Net Rentable Area,” and more. Tenants often skip definitions because they’re dense. But definitions are where landlords can expand what you pay for or narrow what you’re allowed to do.

For example, “Operating Expenses” might sound like routine costs—janitorial, landscaping, snow removal. But some leases include management fees, legal fees, marketing costs, and even the cost of replacing building equipment. If the definition includes “capital expenditures” (big-ticket items) and allows them to be passed through to tenants, you could end up funding a new roof, elevator modernization, or parking lot repaving.

Another common one is “Rentable Area” or “Leasable Area.” If rent is calculated on rentable square feet, your rent may include a share of common areas (lobbies, corridors). That’s not automatically bad—many buildings do it—but you should know the measurement standard being used (BOMA is common for offices) and whether the number can be re-measured later. A small percentage change in area can mean a big change in rent over a 5–10 year term.

Rent isn’t just rent: base rent, additional rent, and “surprise” charges

Tenants usually focus on base rent, but commercial leases often treat many other payments as “additional rent.” That matters because “additional rent” is typically subject to the same remedies as base rent—late fees, interest, and even default. In other words, if you dispute a charge, you may still be required to pay first and argue later.

Common additional rent items include operating expense reimbursements (CAM), property taxes, insurance premiums, utilities, trash, after-hours HVAC, parking fees, and administrative charges. Some landlords also charge for things like building security, pest control, or annual fire system inspections. None of these are inherently wrong, but you want visibility and limits.

Ask for: (1) a clear list of what’s included, (2) an annual reconciliation process with supporting documentation, and (3) the right to audit. Also look for caps—especially on controllable expenses like management fees and administrative costs. And if the lease is “gross” (where landlord pays most building expenses), confirm what’s excluded from gross rent so you’re not paying a gross rate while still reimbursing key costs.

CAM, taxes, and insurance: the clause that quietly grows every year

In many retail and multi-tenant properties, tenants pay their “pro rata share” of common area maintenance (CAM), property taxes, and building insurance. The lease may describe this as “triple net” (NNN) or “net” charges. The tricky part is that CAM categories can be broad, and the math can be opaque.

Start by finding the pro rata share definition. Is it based on your square footage divided by the total leased area? What happens if the building is partially vacant—do you pay a larger share? Some leases include a “gross-up” provision that assumes full occupancy for certain variable costs (like utilities) so you don’t get penalized for vacancy. Gross-up can be fair if it’s limited to truly variable expenses and calculated correctly; it can be unfair if it inflates fixed costs or includes categories that shouldn’t be grossed up.

Next, look for exclusions. Tenants often miss that CAM may include landlord’s capital improvements, leasing commissions, tenant improvement allowances for other tenants, or costs tied to landlord’s negligence. A well-negotiated lease excludes those items or limits them. Also ask for a cap on increases in controllable CAM (not taxes or insurance, which are less controllable). Even a 5% cap can make forecasting easier.

Repair and maintenance: who fixes what when it breaks?

Repairs are where many tenant-landlord disputes start. The lease will usually divide responsibility among (a) the premises (your suite), (b) building systems (HVAC, plumbing, electrical), and (c) structural elements (roof, foundation, exterior walls). Tenants often assume the landlord handles “big stuff,” but some leases push major repairs onto tenants—especially in single-tenant buildings.

Look closely at HVAC. A common trap: the lease says the landlord provides HVAC, but the tenant is responsible for maintenance and replacement. Replacement can be a five-figure expense. If you’re in a space with older equipment, ask for a warranty from landlord, a maintenance history, and a clear line: tenant maintains; landlord replaces (or replacement is shared after a certain age). If the landlord insists the tenant replaces, negotiate a cap or require the landlord to deliver the unit in good working order with a recent service report.

Also watch for “keep in first-class condition” language. It sounds reasonable, but it can be used to demand upgrades beyond normal wear and tear. Try to anchor the standard to the condition at delivery and “ordinary wear and tear excepted.” And check whether you must use landlord-approved vendors—sometimes that increases costs and slows repairs.

Maintenance standards and service contracts: the fine print that affects your day-to-day

Some leases require you to maintain service contracts (HVAC, grease trap, fire suppression, elevators in certain spaces). That can be normal, especially in restaurant or medical uses, but the contract requirements should be realistic and clearly described.

Tenants miss clauses that require a specific vendor, a specific frequency, or a specific reporting process. For example, you might need to provide proof of quarterly HVAC service and send invoices to the landlord within a set time. If you miss the paperwork, the lease may treat it as noncompliance—even if the maintenance was done.

Ask for flexibility: allow any licensed vendor, require “commercially reasonable” service intervals, and avoid penalties that are disproportionate. If the landlord wants strict compliance (often for insurance reasons), request a simple checklist and a grace period so you’re not in default over administrative timing.

Use clause and exclusives: what you’re allowed to do (and what you’re not)

The “permitted use” clause is one of the most important operational clauses in the lease. It defines what your business can do in the space. Tenants often accept a narrow use (e.g., “coffee shop”) without thinking about future growth (e.g., adding baked goods, retail merchandise, catering, classes, or evening events).

A too-narrow use clause can block expansion, financing, licensing, or even a future sale of your business if the buyer’s concept is slightly different. It can also become an issue if your business naturally evolves. Try to negotiate a broader description that still fits the property (e.g., “specialty café and related retail sales” instead of “coffee shop only”).

Also look for exclusives and restrictions. In some shopping centers, landlords grant another tenant an exclusive right to sell certain products. That might limit you from selling sandwiches, smoothies, or even branded merchandise. If your revenue model depends on add-on sales, read every exhibit and center rule that touches on use and exclusives.

Assignment, subleasing, and change of control: the clause that affects your exit plan

Many tenants sign a lease thinking, “If it doesn’t work out, I’ll sublease.” But leases often restrict assignment and subleasing heavily. Some require landlord consent, allow the landlord to recapture the space (terminate your lease instead of letting you sublease), or require you to share “profit” from a sublease with the landlord.

Even more overlooked: “change of control” provisions. If you sell your company, bring in investors, or restructure ownership, the lease may treat that as an assignment requiring landlord consent. That can surprise tenants during fundraising or acquisition negotiations.

Negotiate with your future in mind. Ask for consent “not to be unreasonably withheld, conditioned, or delayed,” set a timeline for landlord response, and carve out transfers to affiliates or as part of a bona fide sale of your business. If you’re raising capital, make sure the lease won’t block normal equity transactions. This is one area where experienced counsel is worth it—especially if your growth plan includes investors or a potential sale.

Security deposit, guarantees, and letters of credit: what you’re really putting at risk

Security deposits in commercial leases can be substantial, and they’re not always treated like residential deposits. The lease may allow the landlord to apply the deposit broadly, keep it for long periods after you move out, or require replenishment immediately after any draw.

Personal guarantees are another big one. Many small and mid-sized businesses are asked to sign a personal guarantee, making the owner personally liable for rent and other obligations. Some guarantees are “full” (covering everything), while others are “good guy” guarantees (liability ends when you vacate and hand back the space in required condition). Tenants often miss the difference, and the financial impact can be huge.

If you can’t avoid a guarantee, try to limit it: cap the amount, limit the time period, or convert it to a “burn-off” guarantee that reduces after a few years of on-time payments. If the landlord requests a letter of credit, confirm the terms for draw, renewal, and return—letters of credit can tie up banking capacity you might need for inventory or expansion.

Insurance and indemnity: the risk transfer you didn’t realize you agreed to

Insurance clauses often read like boilerplate, but they can be expensive and can shift serious risk. Typical requirements include commercial general liability (CGL), property insurance for your improvements and contents, business interruption, and sometimes umbrella coverage. The landlord may also require you to name them as an additional insured and provide waiver of subrogation endorsements.

Indemnity is where the lease says who pays if something goes wrong. Tenants miss indemnities that are too broad—like indemnifying the landlord for claims “arising out of” the premises even if the landlord was negligent. A more balanced indemnity ties responsibility to each party’s negligence or willful misconduct.

Don’t treat insurance as a checkbox. Share the lease requirements with your broker early and confirm pricing. Then negotiate language that aligns with what insurance can actually provide. If a lease requires coverage that’s uncommon or extremely costly for your industry, it’s better to address it before signing than to scramble later and risk default.

Alterations and tenant improvements: the clause that controls your build-out

If you’re building out a space—adding walls, plumbing, specialized electrical, ventilation, or signage—the alterations clause will govern your timeline and cost. Tenants often assume they can “just do the work,” but leases may require landlord approval for plans, contractors, permits, working hours, and even materials.

Pay attention to whether the landlord can charge review fees, require a construction deposit, or mandate specific contractors. Some landlords require you to use their preferred vendors, which can increase costs. Others allow your contractor but require certain insurance limits and lien waivers. None of this is unusual, but you want clarity.

Also look at what happens at the end of the lease. Many leases require you to remove improvements and restore the space to “base building” condition—sometimes at landlord’s discretion. That can be expensive if you’ve invested heavily in custom build-out. A smart negotiation point is to require the landlord to specify at the time of approval whether a particular improvement must be removed at move-out.

Restoration, surrender, and “wear and tear”: the move-out costs that surprise tenants

Move-out obligations can turn into a major bill if you don’t plan ahead. The surrender clause may require professional cleaning, carpet replacement, repainting, HVAC servicing, and repair of any damage—plus removal of signage and patching of penetrations.

Tenants often assume “normal wear and tear” protects them, but the lease may define wear and tear narrowly or impose a higher standard (like “first-class condition”). If the lease requires you to replace carpet regardless of condition, that’s not wear-and-tear—it’s a scheduled expense you should budget for or negotiate out.

Before signing, ask for a delivery condition exhibit and take photos on day one. At move-out, those records matter. And if you’re investing in improvements, negotiate clarity on what stays and what goes. Ambiguity is where disputes (and deductions from your deposit) tend to happen.

Default, cure periods, and remedies: what happens when something goes wrong

No one signs a lease expecting to default. But businesses hit rough patches, mail gets lost, and misunderstandings happen. Default provisions define how quickly a problem becomes a crisis. Tenants often miss how short cure periods can be—sometimes as little as 3–5 days for monetary defaults.

Look for notice requirements. Does the landlord have to give you written notice before you’re in default? Does notice have to be delivered in a specific way (certified mail, courier, email)? If the lease says notice is effective only when delivered to a specific address, make sure that address is correct and update it if your business moves.

Also review remedies. Some leases allow the landlord to accelerate rent (demand all remaining rent immediately), charge high interest, or recover attorney’s fees. Try to negotiate reasonable cure periods, clear notice methods, and limits on extreme remedies where possible. Even small adjustments can give you breathing room to fix issues without litigation.

Operating rules, hours, and access: the clauses that impact your customers and staff

Many leases incorporate “building rules” or “center rules” by reference. Tenants miss them because they’re attached as an exhibit or provided later. But these rules can control hours of operation, loading dock access, parking allocation, noise, odors, trash handling, and even what your staff can do in common areas.

If you run a business with early mornings, late nights, deliveries, or special waste needs (medical, food, manufacturing), confirm the rules match your operations. A gym with 24/7 access needs different terms than a standard office. A bakery needs venting and grease management that a boutique doesn’t.

Also check access rights. Do you have after-hours access? Is there a fee for security escort? Are there restrictions on weekend work during build-out? These details affect your staffing, customer experience, and ability to respond to emergencies.

Renewal options and rent resets: the “future you” clause

Renewal options can be valuable, especially if you’re investing in build-out or growing a location-based business. But tenants often miss the strings attached: strict notice windows, no defaults allowed at the time you exercise, and rent set at “fair market value” as determined by the landlord (or by an appraisal process that can be costly).

If rent resets to market, ask how market rent is determined. Is there an appraisal process with a neutral third party? Are there limits on how high rent can jump? Some leases include a floor (not less than current rent) and no ceiling—meaning rent can spike. Depending on your business model, you may want predictability more than optionality.

Also confirm whether renewal applies to the same space and terms, or whether the landlord can change key terms. If the renewal clause says “on landlord’s then-current form,” that’s a red flag—your renewal could come with entirely new obligations. Try to lock renewal to the existing lease with only rent adjustments and minimal updates.

Early termination and kick-out rights: flexibility that can cut both ways

Some tenants negotiate early termination rights to reduce risk. If you’re testing a new market, that can be helpful. But termination clauses often require hefty fees, long notice periods, and strict conditions. Miss one condition and you lose the right.

On the landlord side, some leases include “kick-out” rights—allowing the landlord to terminate if you don’t hit certain sales thresholds (common in retail) or if the landlord wants to redevelop. Tenants sometimes overlook these because they’re buried in an exhibit.

If you see termination language, read it slowly. Make sure you understand the timeline, the fee calculation, and whether you get reimbursed for unamortized improvements. If your business depends on location stability (like medical or childcare), you may want to avoid clauses that allow the landlord to end the lease early for convenience.

Co-tenancy and percentage rent: retail clauses that can make or break revenue

Retail leases often include co-tenancy clauses (your rent depends on other key tenants being open) and percentage rent (you pay a percentage of gross sales above a breakpoint). These are powerful clauses, and tenants miss key definitions that determine how they work.

For co-tenancy, confirm what counts as a “key tenant,” what “open and operating” means, and what remedy you get if co-tenancy fails—rent reduction, termination right, or both. Also confirm how long the failure must last before remedies apply. A remedy that triggers only after 12 months may not help much if foot traffic drops immediately.

For percentage rent, read “gross sales” carefully. Does it include online sales fulfilled from the store? Does it exclude returns, taxes, tips, and gift card redemptions? Make sure the reporting requirements are manageable and that audit rights are mutual and fair.

Signage, marketing funds, and visibility: the overlooked drivers of foot traffic

Signage is often treated as an afterthought until you realize it’s restricted. Leases may limit sign size, placement, lighting, window coverings, and even the colors you can use. If your brand relies on visibility, confirm what signage you’re actually getting—monument signs, pylon signs, building signage, directory listings, and wayfinding.

Some retail centers also charge marketing or promotional fees. Tenants miss these because they’re small compared to rent, but they add up. Ask what the funds are used for, whether you get reporting, and whether the fee is capped.

If you’re in an office building, signage might be limited to lobby directories and suite entry signs. That can be fine, but if you need clients to find you easily (medical, legal, consulting), ensure the building’s wayfinding supports your customer journey.

Dispute resolution, attorney’s fees, and “prevailing party”: how disagreements get expensive

Leases often include clauses about where disputes must be brought, whether arbitration is required, and who pays attorney’s fees. Tenants miss these because they’re near the back and feel theoretical—until they aren’t.

Watch for one-sided attorney’s fees provisions where the landlord can recover fees but the tenant can’t. A more balanced approach is “prevailing party” fees or mutual fee-shifting. Also check whether the lease allows the landlord to recover fees for routine collection efforts or even for reviewing tenant requests.

If the lease requires arbitration, understand the cost and timeline. Arbitration can be faster, but it can also be expensive, and appeal rights are limited. Sometimes a stepped approach works better: negotiation period, then mediation, then litigation or arbitration if needed.

When professional review is worth it (and who to call)

If the lease is short, the rent is low, and your build-out is minimal, you might feel tempted to sign without legal review. But if any of these are true—long term, big improvements, personal guarantee, complex CAM, or restrictions that affect your operations—professional review usually pays for itself.

A good commercial lease review isn’t just about “legalese.” It’s about aligning the lease with how your business actually runs: deliveries, staffing, customer access, equipment, compliance, and growth. It’s also about negotiating leverage—knowing which clauses are market-standard and which are unusually landlord-friendly.

If you’re looking for help in the U.S., especially around lease negotiations and business-related legal questions, firms that focus on Atlanta business legal services can be a useful starting point for understanding what support looks like and what issues to raise. And if your lease intersects with financing—like build-out loans, landlord consents, subordination agreements, or investor requirements—having debt and equity law experts in your corner can help you avoid signing terms that complicate funding later.

A tenant-friendly way to read the lease: a step-by-step checklist

If you want a practical workflow, here’s a tenant-friendly method that keeps you from getting lost in the pages. First, read the lease once without editing—just to understand the storyline: what you’re renting, for how long, and what you’re paying. On that first pass, flag anything you don’t understand or anything that feels open-ended.

Second, read it again with a highlighter and a note sheet. Create categories: money, repairs, use, build-out, insurance, default, renewal, and exit. Under each category, write down the exact clause number and the key obligations. This becomes your negotiation roadmap and later your compliance guide.

Third, cross-check exhibits and addenda. Many “gotcha” terms live there: rules and regs, parking plans, signage criteria, tenant improvement specs, and estoppel certificate forms. If an exhibit is “to be provided later,” push to get it now. You don’t want to agree to documents you haven’t seen.

Negotiation tips that keep the relationship healthy

Negotiating a lease doesn’t have to be adversarial. The best outcomes usually come from being clear, reasonable, and specific. Instead of saying “this is unacceptable,” try “we can agree if we cap this cost,” or “we can accept this responsibility if the landlord warrants the system is in good working order at delivery.”

Prioritize your asks. If you demand changes to everything, you’ll slow the deal and lose credibility. Focus on the clauses that affect your biggest risks: repair/replacement, CAM definitions, assignment/sublease, guarantee, restoration, and renewal rent. Those are the areas that most often create unexpected costs.

Finally, get every change in writing. Side emails and verbal assurances don’t help if the lease says the document is the “entire agreement.” If the landlord agrees to something, make sure it appears in the lease or in a signed amendment. Clear paperwork now prevents awkward conversations later.

How to keep your lease from becoming a daily headache after you sign

Once the ink is dry, the lease becomes a living document. Put key dates on your calendar: rent escalations, audit windows, renewal notice deadlines, insurance certificate renewals, and maintenance intervals. Many tenants miss renewal windows and lose leverage, or forget to provide updated insurance certificates and trigger default notices.

Create a simple compliance folder: the signed lease, exhibits, insurance COIs, vendor service records, and photos of the premises at move-in. If you ever need to dispute CAM charges or prove you maintained equipment, having organized records makes it much easier.

And keep communication professional and documented. If something breaks, report it in writing. If you’re requesting consent for alterations or signage, follow the lease process and keep copies. A little structure goes a long way toward keeping the landlord-tenant relationship smooth.