By Jessica T. Cooper

When asked “Do I really need to have an attorney review my commercial lease before signing?”, the answer is: absolutely, yes!. While a commercial lease once seemed like a formality, today’s commercial leases are contracts with teeth. The details in a commercial lease are not just boilerplate (or at least they should not be) and instead, they are a means of business strategy between landlords and tenants that govern years-long relationships.
Regardless of whether a commercial lease is being negotiated for the landlord or the tenant, there are certain critical lease provisions that warrant careful consideration, some of which are detailed below:

Delivery Conditions and Timing:

The timing and condition of the leased premises upon delivery by the landlord are common sources of dispute and should be clearly outlined in the lease. For example, if the landlord needs to complete certain repairs or improvements to the premises before the tenant takes possession, the timing for the completion and the scope of the work should be clearly stated in the commercial lease. Equally important, if the leased premises is to be delivered “as is”, the lease should explicitly say so. Additional delivery considerations, such as the leased premises’ utility readiness or whether it will be furnished, are important to include when documenting a commercial lease to avoid headaches down the road.

Use and Exclusivity:

How a leased premises may be used spans multiple different issues. For one, the intended or permitted use of the leased premises should conform to applicable laws (including zoning), and to any covenants, conditions and restrictions of record that are applicable to the leased premises. Landlords and tenants should carefully consider that, depending on the intended use of the leased premises, additional provisions may need to be included in the lease to ensure the tenant can fully utilize the premises in compliance with the permitted use, particularly when repairs or maintenance issues arise. Also important in retail leases specifically, “exclusive use” provisions should be drafted with precision, i.e. a provision prohibiting the landlord from allowing another tenant with a similar business to operate in the leased building or else where if located in a shopping center or strip mall.. Landlords favor narrowly tailored exclusive use provisions to avoid limitations with other tenants, while tenants typically desire broader prohibitions to protect their business. Additionally, the scope of an exclusive use provision should be explicitly defined – For instance, does the exclusive use apply across an entire leased shopping center or only to the outlets? This term is critical to clarify to help avoid disputes about the scope and locations of exclusive use prohibitions.

Rent and Payment Terms:

A “triple net” lease is commonplace in commercial leasing and may be an unfamiliar concept to first-time commercial renters. In a triple net lease, the tenant pays the agreed-upon base rent, in addition to its share of property taxes, insurance and operating expenses related to the leased premises and any common areas, in addition to utilities. The tenant’s share of property taxes, insurance and operating expenses are often referred to as “additional rent”. Any items categorized as additional rent should be clearly detailed in the commercial lease, including the timing and means of payment and, in particular, what is included as operating expenses. For example, the treatment of capital expenditures as additional rent is often a point of negotiation—landlords typically want to include them, while tenants usually push to have them excluded. A typical middle ground is that capital expenditures may be included as operating expenses and charged as additional rent, provided such capital expenditures are beneficial to the tenant and/or the leased premises and are amortized over the useful life of such expenditure.
Maintenance and Repair: The type of lease – a gross lease or a net lease – often generally dictates which party is responsible for maintenance and repair at the leased premises, but it is important to confirm in the commercial lease. In a gross lease, the landlord is typically responsible for all maintenance and repairs, while in a net lease, the tenant is typically responsible for all maintenance and repairs within the four walls of the leased premises, and the landlord is responsible for all structural maintenance and repairs of the leased premises. The question of which party is responsible for the maintenance, repair and replacement of the HVAC serving the leased premises should never be overlooked, either, as it is common source of (costly) disagreement unless carefully drafted.

Assignment and Subletting:

Another source of contention, if not carefully drafted, is the assignment and subletting section in a commercial lease. An assignment of a lease entails a tenant transferring all of its rights and obligations under the lease to another party, whereas a sublease entails a tenant transferring only part of the leased premises to another party. Issues that commonly arise include the landlord’s consent rights before any assignment or sublease, including whether such consent must be reasonable or in the landlord’s sole discretion. Tenants often prefer to include change of control clauses that would expressly permit transfers resulting from internal corporate restructurings (commonly referred to as a “permitted transfer”). From the landlord’s perspective, any potential transfer should be carefully evaluated to help ensure the new tenant is reputable and financially stable, and that appropriate protections are in place to ensure the new tenant’s liability for the remainder of the lease term.
Navigating a commercial lease may seem like an imposing formality, but the devil is truly in the details to protect against future misunderstandings. One size most certainly does not fit all.
This article is for informational purposes only and does not constitute legal advice. Always consult with a qualified attorney for guidance on your specific situation.

Contact

Jessica T. Cooper – [email protected] or 312-775-3617

This article has been updated as of March 15, 2026.