Commercial Lease Playbook

Commercial leases are complex and heavily favor landlords. Know what to negotiate before committing your business.

3
Critical Red Flags
2
Warning Signs
6
Protections to Ask For
5 min
Estimated Skim Time
Quick Jump
Biggest Trap in Commercial Lease Contracts

Base Year for Operating Expenses

First year may have artificially low expenses, making your increases higher

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The 3 most important things to check first

1

Personal Guarantee

You are personally liable for the entire lease term even if your business fails.

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2

Triple Net (NNN) Without Cap

You pay taxes, insurance, and maintenance with no maximum limit.

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3

Demolition Clause

Landlord can terminate lease to demolish building with minimal notice.

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Critical Red Flags

Requires immediate attention
critical

What to Watch For

Common red flags we find in these contracts

Personal Guarantee

Critical

You are personally liable for the entire lease term even if your business fails.

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Warning Signs

Review carefully
warning

What to Watch For

Common red flags we find in these contracts

Exclusive Use Not Granted

Warning

Landlord can lease to direct competitors in the same building.

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What to Ask For

Must-Have Protections

Checklist of protections your contract should include

Essential (Must Have)

CAM cap

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+5 more protections available

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What's Fair

Industry Benchmarks

What is normal vs. what should raise concerns

Metric
Industry Standard
Red Flag
Personal guarantee
Limited or none
Full term
CAM cap
3-5% annual
No cap
TI allowance
$20-50/sqft
$0
Free rent
1 month/year of term
None
Rent escalation
2-3% annual
5%+
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Benchmarks based on industry standards. Individual contracts may vary based on specific circumstances.

Negotiation Scripts

Negotiation Tips

2 scripts available

Copy-paste scripts for common negotiation scenarios

Premium
Scenario

Personal guarantee required

"I understand you require a personal guarantee, but a full-term guarantee is sign..."

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Premium
Scenario

No TI allowance offered

"Given the build-out required for our business, a tenant improvement allowance wo..."

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Get ready-to-use, copy-paste negotiation scripts crafted by legal experts. Just paste into an email or use in conversation.

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Common Traps

Common Traps

Sneaky clauses that often catch people off guard

Base Year for Operating Expenses

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Learn about all the sneaky clauses that catch people off guard, with detailed explanations and exactly what to clarify.

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Related Playbooks

Residential Lease

Apartment rentals, house leases, and room rentals

Partnership Agreement

Business partnerships, joint ventures, and co-founder agreements

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