The Daily Law Blog

A Discussion of Pressing Legal Issues Led by the Attorneys at Daily & Woods, P.L.L.C.

5 Contract Clauses First-Time Commercial Tenants Skip Reading

Signing a commercial lease for the first time is exciting — and the excitement is exactly why important clauses get skimmed instead of read. Here are five that deserve a second look before you sign.

**1. The use clause.** This defines exactly what you’re allowed to do in the space. A use clause written too narrowly can box you in if your business evolves — a restaurant lease that only permits “sit-down dining” may not cover adding a bar or delivery operation later without an amendment.

**2. Assignment and subletting.** If your business needs change — you want to bring on a partner, sell the business, or downsize — can you assign the lease or sublet the space? Many leases require landlord consent, and the standard for when that consent can be withheld (or not) varies widely.

**3. Common area maintenance (CAM) charges.** Your base rent is often just part of the cost. CAM charges for shared maintenance, insurance, and taxes can add substantially to your monthly obligation — and the clause defining how those charges are calculated and capped (or not) deserves close attention.

**4. Personal guarantees.** Many landlords require the business owner to personally guarantee the lease, especially for a new business without an established credit history. That means a lease default could expose your personal assets, not just the business entity’s. Whether — and how much — to negotiate down a personal guarantee is worth discussing before you sign, not after you’re already committed.

**5. Default and cure provisions.** What exactly counts as a default, and how much time do you have to fix it before the landlord can act? A short cure period paired with a broad definition of default can leave very little room for error.

None of these clauses are automatically dealbreakers — but going in aware of what they say, rather than discovering it later, changes the negotiation entirely.

—
Attorney Advertising. This post is for general informational purposes only and is not legal advice. No representation is made that the quality of legal services performed is greater than that of other lawyers. Laws vary by state and change over time — consult an attorney about your specific situation before acting on anything here.

Categories:

Leave a Reply

Your email address will not be published. Required fields are marked *