Commercial Lease Review

One thing is for certain for commercial tenants: it is always a good decision to have your draft lease reviewed by an experienced commercial leasing attorney.


When you receive a draft commercial lease from the landlord, you should assume that the document is very one-sided in favor of the landlord. This is almost always the case. However, it is the landlord’s expectation that you will attempt to negotiate changes.


Usually, before the draft lease is presented, the landlord and tenant already have a mutual understanding with respect to the business terms to be included in the lease. These business terms may be reflected in a letter of intent signed by the parties. The business terms include such items as: the location and square footage of the space to be leased; the length of the lease and any extension options; the lease start date and the rent start date; the amount of rent to be paid; the amount of the security deposit; the pass-through expenses for which the tenant will be responsible; each party’s responsibility for the construction of improvements to the space; the concessions to be received by the tenant (such as free rent and construction allowances); and, the personal guarantees to be provided by the tenant (if any). An attorney can review the draft lease to ensure that the pre-agreed business terms are properly reflected in the draft lease. The attorney can also help you to negotiate or re-negotiate business terms that are missing and/or problematic.


In addition to reviewing the business terms, an attorney will help you to negotiate the legal terms of the lease, which are not typically addressed in the letter of intent. The legal terms include such items as: the permitted uses of the space; the right to assign and sublet; notice and cure rights in the event of default; audit rights with respect to pass-through expenses; pass-through expense exclusions; mutual indemnification obligations, including with respect to hazardous materials; limitations on personal guarantees; limitations on landlord access the space; restoration obligations in the event of construction; termination rights in the event of casualty; subordination, non-disturbance and attornment; mutual attorney fee clause; removal of unfair penalties for non-compliance; etc.


Tenants often overlook these legal terms when the business terms are agreed upon. However, a tenant’s failure to address these legal terms can have drastic consequences. For example, a tenant may not be able to sell its business, may not have any opportunity to cure a default before getting evicted, may be excessively or unreasonably charged for pass-through expenses, may not be able to secure lender financing due to the landlord’s priority lien, etc.


The good news is that most commercial landlords are willing to revisit these items. An experienced commercial leasing attorney understands how to approach the landlord with alternative language that is likely to be accepted.


GRDD Law offers reasonable flat fee options to tenants in need of a commercial lease review. Our attorney will review the lease, flag the problematic areas, discuss your needs and goals, and work closely with you to implement a negotiation strategy. If we are engaged to take the lead on the negotiation, we will revise the lease, communicate directly with the landlord and/or its attorney, and cordially advocate for your interests. Typically, several drafts of the lease will be exchanged until the parties have established the “best and final” terms that the landlord is willing to accept. At that point, we will help you evaluate whether it makes sense to execute the lease document and move forward.


If you are considering our firm for your lease review project, you are encouraged to read the Firm’s Google reviews that pertain to lease reviews.

Contact GRDD Law to speak with an experienced landlord lawyer today.