Most small business owners sign commercial leases the same way they sign terms of service agreements — quickly, under pressure, with a vague sense that the important things have been discussed verbally and the paperwork is a formality.
It isn't. The lease is the binding document. Whatever your landlord said in the tour, in the email thread, in the letter of intent — if it isn't in the lease, it isn't enforceable. This checklist is for the 48 hours before you sign.
Before anything else, verify that the numbers in the lease match what you negotiated.
Check the base rent, the commencement date, the lease term end date, and any free rent period. These should be exactly what you agreed to. Errors here are more common than you'd expect — leases get drafted from templates, commencement dates get transposed, and free rent periods get omitted or shortened. Find it now, not when the first invoice arrives.
Check every rent escalation clause. If you negotiated 3% annual increases and the lease says 4%, that 1% difference compounds over a 7-year term into a meaningful amount. On $8,000/month starting rent, the difference between 3% and 4% annual escalation is over $9,000 in total rent paid over 7 years.
Verify your security deposit amount, the conditions under which it can be applied, and the timeline for return after lease expiration. In most states, landlords have 14–30 days after move-out to return the deposit or provide an itemized deduction statement.
If there's a personal guaranty — and there almost certainly is in a commercial lease — read it in full before signing the main lease. It's often an exhibit at the back, easy to skip when you're fatigued from reviewing 40 pages of lease language.
Confirm whether it's unlimited or limited. If it's unlimited, push for a rolling 12–18 month limit or a burn-off after 24 months of on-time payment. If it has a burn-off, read the conditions carefully — some burn-offs require perfect payment history with zero late payments for the entire initial period, which is a high bar.
Check whether your spouse is being asked to sign. In community property states — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin — a spouse's signature exposes community property to collection. Understand what you're agreeing to before both signatures go on the page.
Search the lease for the word "holdover." Read every sentence around it.
Note the rate — 150%, 200%, or something else. Note whether it includes "any portion thereof" language. Note whether there's a landlord notice requirement before holdover rates begin. Note whether your state has any residential tenant protections that apply.
Put your lease expiration date in your calendar immediately with a 90-day reminder. Most holdover situations happen not because tenants decided to stay, but because they lost track of their end date in a long-term lease. A 90-day reminder gives you time to either negotiate a renewal or find a new space before the holdover clock becomes relevant.
If it's a NNN or modified gross lease, find the CAM section and check three things.
First, is there an annual CAM increase cap? Uncapped CAM means your occupancy cost can grow unpredictably year over year. A 3–5% annual cap is the standard ask.
Second, are capital expenditures explicitly excluded? If not, roof replacements, parking lot repaving, and HVAC replacements can show up in your CAM charges. You're paying for improvements to a building you don't own.
Third, is there a management fee cap? Landlords routinely charge 10–15% of gross operating expenses as a management fee. A 5% cap is reasonable. Anything above that is the landlord billing you for the privilege of managing their own asset.
Request the last two years of CAM reconciliation statements before signing. These are the actual bills, not estimates. They'll tell you immediately whether the landlord's NNN estimate is realistic or whether you should budget significantly higher.
Find the assignment and subletting clause. If it says landlord consent "may be withheld in Landlord's sole and absolute discretion," you have no viable exit path if your business needs to close or sell before the lease term ends.
Push for "not unreasonably withheld, conditioned, or delayed" with a defined response window of 15 business days. This single change converts a locked position into one with at least a theoretical exit through subletting or assignment.
Also confirm whether the personal guaranty terminates if you successfully assign the lease. If it doesn't, you could sell your business, the new owner takes over the lease, and you remain personally liable for their performance for the rest of the term. That's a trap worth closing explicitly.
Read the use clause. It defines specifically what business activities are permitted in the premises. If it says "retail sale of women's clothing" and you later want to add accessories or expand into adjacent categories, you may need landlord consent — or you may be in technical breach.
Check the exclusivity clause, if there is one. An exclusivity clause prevents the landlord from leasing nearby space in the same center to a direct competitor. If you're a coffee shop, you want exclusivity on coffee. If you're a nail salon, you want exclusivity on nail services. If the lease doesn't include one, ask for it — landlords grant exclusivity regularly when the tenant's concept is a genuine traffic driver.
Check the permitted alterations. Many leases require written consent before any physical modification to the space, including painting. Know the process before you start building out, not after you've already installed something without consent.
Find every reference to "original condition," "surrender," and "restoration." Read what you're required to do to the space when you leave.
If the lease requires you to restore the space to its original condition at lease expiration, ask the landlord to specify in writing which improvements require removal. Get that list as an exhibit before you sign, not at the end of your lease term. Many landlords will agree to an "as-is surrender" option — the right to leave your improvements in place unless the landlord requests removal in writing within 30 days of lease execution.
If you're planning a significant buildout, get the restoration question answered before you spend the money. A $60,000 buildout that costs $20,000 to undo is a real number in your exit calculation.
Find the default clause. Note the cure period for monetary defaults — the number of days you have to pay missed rent before the landlord can declare formal default and accelerate the lease.
Three calendar days is the landlord-friendly standard. Five business days is the minimum you should accept. The difference matters most when payment failures are technical rather than financial — a wire that didn't clear, a bank holiday, an accounting error. Three calendar days doesn't give you enough runway to catch and correct a processing issue before you're in formal default.
Check whether default triggers acceleration — meaning the full remaining lease obligation becomes immediately due. If it does, formal default isn't just a procedural step; it's a mechanism that converts a missed payment into a six-figure judgment. Know the stakes before you're in the situation.
Run the lease through LiabilityScore™. The checklist above covers the most common exposure points, but it's not exhaustive — every lease has its own quirks, and a 40-page commercial lease has more surface area for hidden risk than any checklist can fully cover.
The scan takes 60 seconds. It will flag what the checklist might have missed, score the overall risk level, and tell you specifically what to negotiate. Do it before the ink dries, not after.
Before you sign, get a score.
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This article is for educational purposes only and does not constitute legal advice. LiabilityScore™ identifies potentially risky contract terms — it is not a substitute for review by a licensed attorney. Always consult qualified legal counsel for advice specific to your situation.