Commercial Lease Review

What is a Commercial Lease Review?

A commercial lease review is when a potential tenant hires a lawyer to review a commercial lease agreement provided by a landlord to rent property. Tenants (and lawyers representing the tenant) want to clearly understand the terms of the tenancy and look for any potential issues within the lease agreement that may be problematic. A tenant may also want to negotiate lease terms that make the agreement more favorable.

Top Terms to Review in a Commercial Lease

Commercial leases can be complex legal documents with big financial implications on a potential tenant. We always recommend hiring a commercial real estate lawyer to help review the agreement, given their background and experience in lease transactions. Below are the top terms to identify and review in a commercial lease:

1. Basic lease terms. Find the basic lease terms in the agreement, which includes the monthly rental amount, length of the lease, how the space will be used, and any security deposit requirements.
2. Maintenance and repairs. Review who is responsible for any maintenance or repairs required for the property. A tenant may run into plumbing, electrical, or HVAC issues and should have clarity on who is responsible for paying for these issues.
3. Alterations. Understand the ability to make alterations to the property. This may be critical for a tenant’s business plan, if they plan on any build outs to support their business.
4. Insurance requirements. Leases typically require the tenant to carry insurance coverage to rent the property, so find this and understand the requirements.
5. Lease renewal. Identify how the lease renews and if there are any changes to the rent amount over time. A tenant may want to move properties or get out of a lease after it expires, so understand the obligations of both parties when it comes to lease renewal.
6. Assignment or subletting. A lease will outline assignment or subletting terms. Learn if there are any restrictions or fees associated.
7. Default and termination. Learn what happens if a tenant defaults on their lease or chooses to terminate the lease. It is important to understand the consequences or implications or both.
8. Hire legal counsel. It is recommended to retain legal counsel to help the tenant review the lease. An experienced real estate lawyer will understand par terms for commercial leases, and help translate any of the complicated legal language and its implications.

How Much Does It Cost to Review a Commercial Lease?

The cost to review a commercial lease can vary depending on the agreement’s length and complexity. Other factors that impact legal fees are the lawyer you hire. Lawyers with greater experience will charge more and lawyers in more expensive markets have higher rates.

According to ContractsCounsel’s pricing data, the average cost (i.e., legal fees) to review a commercial lease is $690 [1].

Below is some more legal fee data to explore:

How Do Lawyers Charge for a Commercial Lease Review?

A lawyer can review your commercial lease for a flat fee or an hourly rate.

• Flat Fee Commercial Lease Review: If your business requires ongoing legal advice on other matters, then a flat fee may be better for you because there are no surprise fees after the initial consultation.
• Hourly Rate Commercial Lease Review: If you use a lawyer to review your commercial lease, they will likely charge you an hourly rate. This means you pay for every hour they spend reviewing your contract.

A commercial lease review is important to ensure you are protected. The information in this article can help you understand what you need when reviewing a commercial lease and guide you on what to expect if you hire a lawyer.

Hiring an experienced real estate lawyer is your best bet to ensure your Commercial Lease is correct, concise, and serves your needs.

The Importance of Customizing a Commercial Lease for Your Business Type

When reviewing a commercial lease, it’s crucial to ensure the agreement is tailored to your specific business needs. Not all leases are created equal, and what works for a retail business might be a poor fit for a manufacturing company or office space.

For example, if your business involves retail, your lease should account for foot traffic, signage restrictions, and operating hours. A restaurant lease might require provisions about kitchen modifications or specific health and safety regulations, while a technology company leasing office space may need flexibility for renovations to support technology infrastructure.

Zoning laws can play a huge role in what type of business can operate on a commercial property. A lawyer familiar with local regulations can help you verify that the property is appropriately zoned for your intended use. This customization ensures that your lease not only covers basic tenancy but also aligns with your specific operational requirements and long-term growth goals.

How Does a Commercial Lease Review Work?

During a commercial lease review, a lawyer reviews your lease agreement to ensure it is in your best interest. This can be important because if any clauses are worded poorly, it could put you in an unusually high-risk position.

A lawyer for a lease agreement can:

• Review and explain the lease to you
• Review and redline the lease for you
• Review, redline, and negotiate the lease terms for you

Depending on how long the landlord has been negotiating commercial leases, they can take anywhere from ten days to three months or longer to complete. Contact a business real estate attorney today if you need assistance finding affordable office space or negotiating a commercial lease form.

Here is an article that reviews how a commercial lease agreement works.

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What Information Will You Need Ready?

When hiring a lawyer to review a commercial lease, they will want to understand many things about your situation and business. Below is some information you will need ready:

Personal Information

A lawyer will need to intake you as a client and will want to collect your personal details so they can put an engagement letter in place. This information may include:

1. Full legal name
2. Address
3. Email address
4. Phone number

Business Information

A lawyer will want to collect more details about your business so they can review the lease with the information in mind. Examples of information they may want to collect is:

• Business's full legal name
• State where the business was formed
• Type of business entity (e.g., LLC, S Corp, C Corp, etc.)
• Business's primary activities
• Business's financials, revenue model
• Business plan and how it may relate to the commercial property

Details About Tenancy

Understanding details about what the tenant is looking for in a commercial space and how they plan to use it will be key in reviewing the terms of the lease. A lawyer will want to understand:

1. How you plan to use the space for your business
2. If you plan to make any alterations to the property
3. If you plan to use all of the space or want to sublease to a third party
4. What amenities your business requires (e.g., parking, etc.)

What Type of Lawyer Do I Want for a Commercial Lease Review?

Real estate attorneys typically handle commercial lease reviews. As a result, they are well-versed in landlord-tenant law. They can help you identify clauses that may contain poor wording or be unacceptable for your business.

Commercial real estate lawyers can advise on what lease type would best suit your needs and even review the lease to ensure it contains all of the necessary clauses for your operation.

Landlords may try to slip clauses into a commercial lease agreement that are aimed in their favor, not yours. For example, some landlords will even include clauses that allow them to cancel a lease if economic conditions change.

Tenants might not notice these additions, but lawyers usually point out this issue during lease review and advise you on how to negotiate it.

Other Terms to Know

We discussed top terms to look for in a commercial lease above. Here is a list of other terms in a commercial lease that you want to know and understand:

• Clearly Defined Location Description: Some leases are vague about your renting location. Look to see that size and restrictions on the use of property are made clear.
• Use Clause: This will outline how the tenant may utilize the leased commercial space and will need to align with your business goals.
• Maintenance and Repairs: This clause will spell out who is responsible for maintenance and repairs of the property. This is important to understand from a financial perspective.
• Alterations: If you want to renovate or alter the property, make sure you are aware of what alterations are permitted (if any), so that they align with your business plan.
• Rent Payment: Understand the rent amount, frequency of payments, if there are any planned increases, and any other terms related to your financial liability.
• Insurance Requirements: Many leases require insurance on both the landlord and tenant’s parts. Check to see that the amount of coverage requested by the landlord is reasonable, and make sure it is clarified in the lease. Again, a lawyer would be helpful if this discussion leads to negotiations.
• Renewal Terms: You must ensure the renewal terms align with your business’s growth plan. Check to see how and when the renewal is triggered, and ensure you know any notification requirements to renew.
• Assignment Options: A landlord usually wants the contracting party to be the tenant. However, if your business’s needs change in the future, you need to know if you have the option to sublet or assign the lease to a third party. Here is another opportunity to lean on an expert to learn how to negotiate a commercial lease.
• Indemnity : It is common for landlords to include indemnity terms in the lease. Make sure, if there is an indemnity provision, that it is not on unreasonable terms that clearly favor the landlord.
• Termination/Holdovers: Check to see if there are penalties for early termination of the lease or holdover periods.

Here is an article that helps you understand key terms in a commercial lease agreement.

Why is it Important to Have Your Lease Reviewed by a Lawyer?

It is important to have your commercial lease agreement reviewed by a real estate lawyer for the below reasons:

• Clarity of Understand. As a tenant and likely business owners, it is extremely important to understand the terms that govern one of your biggest expenses – real estate. You want to make sure you know all of the key terms and what they mean.
• Size of Transaction. Given Given commercial lease terms can sometimes be for 5-10 years, the size of the investment is likely significant. For example, if you sign up for a 5-year lease at $5,000 per month, the lease will represent a $300,000 business expense. It is worth making a small investment to make sure you are best protected when signing up for a substantial cost for your business.
• Hidden Costs. In most leases, there will be terms that outline who pays for repairs and maintenance. You want to make sure you understand all financial liability you will have as a tenant.
• Restrictions. Some businesses may want to renovate or alter the property. Understanding what is allowed and what isn’t allowed is important as it should align with your business plan.
• Negotiation. A commercial real estate lawyer will understand certain terms that you can likely negotiate with your landlord, which may put your business in a better position to succeed.

Common Red Flags in Commercial Lease Agreements

Commercial lease agreements often contain clauses that may seem benign at first but can lead to significant financial or legal issues down the road. Here are some common red flags to watch for:

1. Hidden Costs: While rent may seem straightforward, leases often include provisions for additional costs like maintenance, repairs, or common area expenses. These can add up quickly, so it’s essential to understand what costs you're responsible for beyond the base rent.
2. Unfavorable Escalation Clauses: Many leases include rent escalation clauses, which increase rent annually or at predetermined intervals. While this is common, the amount of the increase can vary greatly. Look for escalation clauses tied to external indexes, like inflation, which could result in higher-than-expected rent hikes.
3. Overly Broad Indemnity Clauses: Some landlords include indemnity clauses that unfairly favor them, placing all liability on the tenant, even for issues beyond the tenant’s control. Be wary of clauses that require the tenant to indemnify the landlord for damages caused by the landlord’s negligence.
4. Restrictions on Alterations or Signage: Businesses, especially retail, often need to customize their spaces or use specific signage. Some leases may impose unreasonable restrictions on alterations or signage, hindering your ability to operate effectively or make your brand visible.

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References

1. ^ Based on real pricing data from ContractsCounsel's marketplace. Last updated 15 May, 2026.