Commercial Lease Clause Library
What common lease clauses mean, why they matter, and what tenants typically negotiate.
Not legal advice. Use this as a checklist and confirm specifics in your lease and local market.
CAM / Operating Expenses / Additional Rent
This is where “hidden rent” lives. A vague CAM definition can turn a good base rent into an unpredictable monthly bill.
Common red flags
- No budget, no reconciliation, no audit rights
- Capital replacements billed to tenant without amortization
- Unlimited “management” or “administrative” fees
Negotiation ideas
- Require itemized budgets + annual reconciliation and audit rights
- Exclude capital replacements or require amortization
- Cap management/admin fees and exclude landlord legal fees
Repairs vs. Replacement (Roof/HVAC/Parking)
Many leases blur “maintenance” into “replacement.” One replacement bill can dwarf years of rent savings.
Common red flags
- Tenant responsible for “all repairs and replacements”
- No definition of “structural” vs “non-structural” repairs
- No cap on tenant’s capital responsibility
Negotiation ideas
- Separate routine maintenance from capital replacement in writing
- Add caps or landlord amortization for major systems
- Clarify who owns and replaces equipment serving multiple tenants
Insurance, Deductibles, and Indemnity
Insurance wording controls who pays when something goes wrong—and deductibles can be five figures or more in some markets.
Common red flags
- Tenant pays “all deductibles” regardless of fault
- Broad indemnity that covers landlord negligence
- “Any insurance the landlord deems necessary” without limits
Negotiation ideas
- Cap deductible responsibility or tie it to fault/control
- Narrow indemnity and require mutual negligence standards
- Define required coverages precisely with reasonable limits
Default, Remedies, Fees, and Acceleration
Default language is where small issues become business-ending events (lockouts, acceleration, attorney fees).
Common red flags
- No notice/cure periods (or very short cure windows)
- Rent acceleration for minor defaults
- Unlimited attorney-fee shifting
Negotiation ideas
- Add written notice + cure periods for monetary and non-monetary defaults
- Remove or narrow acceleration language
- Cap late fees/interest and limit fee-shifting
Rent Commencement and Delivery
A common tenant pain point is paying rent while the space is unready due to buildout, permits, or landlord delays.
Common red flags
- Rent starts on a fixed date regardless of delivery condition
- No remedies for landlord delay
- No linkage to required approvals/CO (if applicable)
Negotiation ideas
- Tie rent start to “usable premises” and completion of landlord work
- Add permit/CO contingency when needed
- Add rent abatement or termination rights for extended delays
Assignment and Subleasing
If you sell your business or need to downsize, assignment/sublease terms determine whether you can exit without a lawsuit.
Common red flags
- Landlord can withhold consent “in its sole discretion”
- Profit-sharing on assignment without clear accounting
- Ban on subleasing or affiliate transfers
Negotiation ideas
- Require consent not to be unreasonably withheld/delayed
- Allow affiliate transfers and reasonable subleasing
- Define conditions clearly (financials, use, compliance)
Personal Guarantee
A guarantee can make the owner personally liable even if the business fails. Many guarantees are broader than tenants expect.
Common red flags
- Unlimited, continuing guarantee with no end date
- Guarantee survives assignment/termination in broad terms
- Cross-default language tying other obligations to the lease
Negotiation ideas
- Ask for a limited guarantee (amount/time) or “burn-off” after performance
- Limit to specific obligations (e.g., unpaid rent) and exclude consequential damages
- Avoid broad survival and cross-default terms where possible
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