Key Clauses in Commercial Lease Agreements — and What Both Sides Should Watch

Signing a commercial lease can lock a business into years of obligations. Understanding a handful of key clauses before you sign can save you far more than legal fees later.

Rent, escalations and hidden costs

Look beyond the base rent. Escalation clauses, common-area maintenance charges and pass-through taxes can quietly add a large share to your monthly cost.

Ask for caps on annual increases and a clear, auditable breakdown of any shared expenses so you are not paying for the landlord's capital improvements.

Exit, assignment and personal guarantees

Businesses change. Negotiate rights to assign or sublease so you are not trapped if you outgrow the space or need to move.

Personal guarantees are common but negotiable. A "good-guy" guarantee that ends when you properly vacate is far safer than an open-ended one.