The most consequential commercial lease terms often include permitted use, pass-through expenses, assignment and subletting, personal guarantees, default and cure rights, renewal options, and early exit mechanics.
This article provides general information and is not legal advice. The right approach depends on the facts, documents, and law applicable to a particular matter.
Rent is only one economic term
Operating expenses, taxes, insurance, maintenance duties, build-out obligations, and escalation mechanisms can materially change the real cost of occupancy.
Plan for change
A business may grow, contract, sell, or restructure. Assignment, subletting, change-of-control, renewal, and exit provisions should be reviewed with those possibilities in mind.
Defaults deserve careful reading
Notice, cure periods, remedies, late charges, acceleration, and guaranty provisions can determine how much flexibility exists when something goes wrong.
Frequently asked questions
Should I sign the letter of intent before legal review?
A short nonbinding LOI can be useful, but detailed economic or legal commitments should be reviewed carefully because they may frame the later lease negotiation.
Is a personal guarantee always required?
No. It is a negotiated risk allocation and may depend on tenant credit, deal economics, market conditions, and landlord leverage.