Real Estate Law

Five clauses to read twice before you sign a commercial lease

The rent is the number everybody negotiates. The clauses below are the ones that decide what the space really costs.

Operating expenses. A gross lease and a triple-net lease can carry the same headline rent and very different annual totals. Ask for the prior year's reconciliation.

Assignment and subletting. If your business is likely to be sold, financed or restructured, a landlord consent standard of 'sole discretion' is a problem worth fixing now.

Repair and restoration. Who maintains the roof, the HVAC and the parking area, and what condition must the space be returned in.

Exclusivity and use. A narrow permitted use limits what you can do; a missing exclusivity clause lets a competitor open next door.

Renewal. An option to extend at 'market rent' without a mechanism for setting it is not really an option at all.

This note is general information, not legal advice. Every matter turns on its own facts — speak with a lawyer before acting.

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