Commercial Lease Agreement Review

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A commercial lease agreement review involves inspecting the lease form for any sections or clauses that may affect the business of the tenant who uses the property. The review also considers business operations and types to ensure all activities comply with state or federal laws.

It is significant for the clauses to be clear for both the landlord and the tenant to prevent legal complications. That is why a commercial lease review is vital in analyzing the document before both parties sign it.

The most convenient way to review a commercial lease is by approaching a real estate lawyer with relevant experience.

What Are the Things to Consider During a Commercial Lease Review?

A commercial lease review helps ensure that the agreement is legally binding and adheres to real estate laws. The review helps add security and protection for both parties. Tenants and landlords, including their respective attorneys, must consider the following during the commercial lease review:

  • Verification of Commercial Property

    The tenant must possess a commercial property to run a business in many states of the US. It is a part of the country's taxation policy. Hence, its advisable to inspect the property before any transactions.

  • Property Ownership

    The lawyer must ensure that the risk involved is reduced to the minimum possible for both the tenant and the landlord. Collecting relevant proof from government sources is recommended to ensure that the property owner is not a fraud and has all documents to prove ownership.

  • Analyze the Drafted Contract

    There is a series of negotiations between both parties during the process of drafting a contract. It includes changing many details to ensure they align with everyone's requirements. Moreover, ensuring that the drafted contract also aligns with government policies is necessary.

    The respective attorneys must analyze the final contract before conducting the commercial lease review to ensure it is as per the details received from both parties. They must ensure that no detail is missed and that it falls true per the last negotiation.

  • Limits of Rental Use

    The use of the rental space is limited for most tenants. They usually rent a place for a particular business which is clearly stated within the contract. Before signing a commercial lease, the tenant and owner should agree on all the statements mentioned in the agreement.

    Further, the tenant must limit the use of the rental property to the specific activity mentioned in the contract. It is legally binding for the tenant. The property owner can file a case against the tenant if the person does not comply with the rules.

    The individual reviewing the commercial lease must check whether the legal document mentions the above obligations.

  • Rental Cost

    The rental cost of the property is decided beforehand. It is based on the local rate of the area of the particular property. Moreover, the rental cost is also determined by several other parameters, such as how the property has maintained its position, its road-facing location, etc.

    While most property owners demand a monthly rental cost, some may also ask for a quarterly or yearly amount. This is decided in the initial rounds of discussion, along with the rental cost and the payment mode. The contract also includes clauses related to the due date and late payment charges.

    The individuals who conduct the commercial lease review must ensure that such clauses are mentioned in the contract.

  • Additional Costs

    As mentioned below, several additional costs are associated with a commercial lease agreement.

    1. Maintenance Costs : The society where the property is situated demands a certain amount every month or quarter to conduct the basic activities and repair expenses which comprise the maintenance cost.
    2. Insurance Costs : According to government norms, a commercial property must have high security. It helps protect the property against situations such as theft or maintenance hazards. The property owner must pay a set amount to the insurance-providing companies as a part of the process.
    3. Commercial Tax : It is compulsory to pay the commercial tax to the government for doing business on commercial properties.

    When the commercial lease agreement is drafted, it is necessary to determine who will pay for the additional costs. The same details must be checked when conducting the lease review.

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Key Terms Related to Commercial Lease Agreement Review

Here is a list of key terms related to the commercial lease agreement review.

  • Base rent is the predetermined amount that the business tenant must pay every month.
  • Free rent is the specified number of rent-free months a commercial landlord offers to the tenant.
  • A turnkey is a space or property ready for possession and accommodation.
  • Usable square feet are common among tenants with calculated usable spaces.


A commercial lease review helps build trust between both parties who sign the contract. However, the legal terms related to the lease agreement are complicated. It is advisable to approach an experienced lawyer to analyze the legal document.

If you are looking for a professional attorney to review your commercial lease, Contracts Counsel is the best place for you. Post a project, mention all details and requirements, and get the best legal assistance in no time.

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