Every commercial lease starts from the landlord's template. That's not a conspiracy — it's just how it works. The landlord's attorney drafted it, the landlord uses it for every tenant, and it's written to protect exactly one party.
That doesn't mean you can't change it. It means you need to know what a fair version looks like before you start negotiating, because the landlord's template won't tell you.
Here's a clause-by-clause comparison of what landlords put in front of you, and what a balanced lease actually looks like.
What's wrong with it: A fixed 4% annual increase sounds modest until you run it out. On a $8,000/month starting rent over a 7-year lease, that's $10,122/month by year seven — a 27% increase over the lease term. You're budgeting for a cost that grows automatically, regardless of whether your revenue grows at the same pace.
Fair version: Rent increases tied to CPI (Consumer Price Index), capped at 3% annually. This connects your rent obligation to actual economic conditions rather than a number the landlord picked. In low-inflation years, your increase is lower. The cap protects you in high-inflation years. Many landlords will accept CPI-based increases — they're standard in well-negotiated commercial leases.
If the landlord insists on fixed increases, push the cap down to 2.5–3% and add a floor of 0% so rent can't increase in years where CPI goes negative.
What's wrong with it: You're being asked to maintain systems you didn't install, don't fully control, and may not understand the age or condition of. An HVAC unit that's 12 years old when you move in can fail within a year. Under this clause, that's your $8,000–$15,000 replacement — for a system you didn't install and didn't ask for.
Fair version: Landlord maintains all major building systems — HVAC, plumbing, electrical, roof, and structural elements. Tenant maintains the interior of the premises only: cosmetic repairs, light fixtures, appliances brought in by tenant. Any repair over a defined threshold (typically $500–$1,000) is the landlord's responsibility unless caused directly by tenant negligence.
Push specifically for a clause that requires the landlord to disclose the age and service history of all major systems at lease execution. If the HVAC is 10 years old, you want that in writing — because it changes the repair risk calculation entirely.
What's wrong with it: There is no cap. CAM charges are notoriously unpredictable and frequently inflated. Management fees — which are the landlord billing you for managing their own property — typically run 10–15% of gross CAM expenses on top of the actual costs. Capital improvements like roof replacements or parking lot repaving can show up as CAM charges, meaning you're paying for improvements to a building you don't own.
Fair version: CAM charges capped at a fixed annual increase (typically 3–5%), with capital improvements explicitly excluded from CAM. Management fees capped at 5% of actual operating expenses, not gross revenues. Tenant gets audit rights — the right to review landlord's CAM calculations annually and dispute overcharges within 90 days.
The audit right is the most valuable clause most tenants never ask for. CAM overcharges are common enough that commercial tenant attorneys routinely find recoverable amounts when they audit — sometimes thousands of dollars per year.
What's wrong with it: "Sole and absolute discretion" means the landlord can say no for any reason or no reason. If you need to sell your business, bring in a partner, or exit the lease early by finding a replacement tenant, the landlord can block all of it. You're locked in with no exit path.
Fair version: Landlord's consent to assignment or subletting shall not be unreasonably withheld, conditioned, or delayed. Landlord must respond within 15 business days. Reasonable grounds for refusal are limited to financial incapacity of the proposed assignee or a materially different use of the premises. The landlord cannot withhold consent simply to extract a higher rent or a new personal guaranty from the incoming tenant.
"Not unreasonably withheld" is the standard in most well-negotiated commercial leases. It's a significant shift from "sole and absolute discretion" and worth fighting for, especially in a longer lease.
What's wrong with it: Three days is not enough time to cure a payment default if you're a small business managing cash flow. A wire transfer delayed by a bank holiday, an ACH that didn't process, an accounting error — all of these can put you in technical default with three days to fix it before the landlord has the right to accelerate the entire lease obligation.
Fair version: 5 business days to cure a monetary default, 30 days to cure a non-monetary default (with an extension if the cure reasonably requires more time). A grace period of one missed payment per calendar year before formal default proceedings can begin. These terms are standard in tenant-favorable leases and protect you from technicalities that can spiral into serious legal exposure.
No termination right, and renewal options that require notice 180 days before expiration — or the option lapses.
What's wrong with it: Most landlord templates have no early termination provision at all. Your only exits are subletting (which requires landlord consent), assignment (same), or default. If your business model changes, if you need to downsize, if a key anchor tenant leaves the shopping center and foot traffic collapses — you're stuck for the full term.
Renewal options with 180-day notice windows are traps for busy business owners. Miss the window by a week and you've lost the right to renew at the agreed rate. The landlord can now offer you market rent — which may be 30–40% higher than your current rate.
Fair version: A mutual early termination right after year two or three, exercisable with 6 months written notice and a termination fee of 3–6 months rent. This gives both parties an exit at a defined cost rather than a locked-in obligation with no flexibility.
Renewal options should require notice no earlier than 180 days and no later than 90 days before expiration — giving you a 90-day window rather than a single day to remember. Add a self-operative renewal clause as a fallback: if neither party provides notice by the deadline, the lease automatically renews for one year at the current rent rather than converting to a month-to-month holdover situation.
Force majeure excuses the landlord's performance obligations but explicitly excludes Tenant's rent payment obligations.
What's wrong with it: You probably noticed this clause's practical limits during 2020, when commercial tenants across the country discovered that their force majeure provisions didn't excuse rent during government-mandated closures. Landlord-drafted force majeure clauses are asymmetric by design — the landlord gets relief from their obligations; you don't.
Fair version: Force majeure applies symmetrically. If a government order prevents you from operating your business from the premises, rent abates proportionally for the duration. This is harder to negotiate because landlords have mortgages to service regardless of your operating capacity, but partial rent abatement during government-mandated closures is a reasonable ask that more landlords are accepting post-2020.
The gap between a landlord's template and a fair lease isn't about catching bad actors. Most landlords aren't trying to trap you — they're using the document their attorney gave them, which was written to protect their interests. It protects their interests very well.
Your job is to know what a balanced version looks like before you sit down to negotiate. You can't push back on a CAM cap you didn't know was missing, or an audit right you didn't know to ask for, or a default cure period that's three days when it should be five.
Scan your lease through LiabilityScore™ before you start negotiating. We flag each of these clauses, show you what the standard says and what a fair version looks like, and score the overall risk in plain English. Knowing where the imbalances are is the first step to fixing them.
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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.