Pitfalls to Watch Out for in your Commercial Lease

If you are looking out for a new property or if you want to make sure that the property you are looking out for is right for your needs then there are a couple of things that you need to look out for. Unfortunately, a lot of businesses end up losing out on a ton of money every single year because of their lease so if you want to avoid all of this or if you want to make sure that your lease is solid then there are some things that you can do about this.

Rental Reviews

When you undergo a rental review, this will be an assessment of the rent that you are paying. There is a high chance that you will undergo a rental review when you have a very long lease and it can make all of the difference to your financial situation. Reviews can be very complicated and they can even contain a variety of different factors as well. The main review that you will face is the open market review and this means that the rent that you pay is put up for negotiation. If you find that you are being put up for rent reviews a little too often then make sure that you keep an eye out for this and even hire a solicitor to talk you through the process. Some landlords want to charge you more than they have to because they know how important your property is to you and they also know how many customers you’ll lose if you do happen to move. For this reason, it helps to monitor your reviews to see if you are overpaying, being put under review too often or if you are being put up for a review before you are actually due to have one.


Another thing that you need to look out for is the cost of repair for your property. You also need to look out for the cost of insuring it as well. You have to understand who is responsible to make any repairs if something should go wrong. The wording in your lease is everything here, and it also helps to find out what the definition of “repair” is according to your landlord. Some people will try and pin more responsibility on the tenant so that they can come away with more profit at the end of the term and this is another factor that could be brought up during your lease negotiation as well. If you want to avoid this then make sure that your repair clause is clear and that you understand your own degree of responsibility. When you are aware of this information and what you are entitled to do if something goes wrong, you can then start to prepare for the future.


The lease really does need to fit in with any objectives that you have in the long-term. If you happen to commit to a long-term lease then you will not be able to downsize or even upgrade your property during this time. You may not think that this is a problem, but if you are taking out a lease for more than a couple of years then this can be a serious concern. You need to plan ahead in this instance and you also need to be aware of any company expansion plans that you have as well. Remember that a couple of years is a very long time when you run your own business and if you happen to rocket in terms of your profit then the last thing you’ll want to happen is for you to be stuck in one building for the next 5 years.


When choosing your rental property, the location is as important as the building itself. Property search engines such as Howard Hanna are great in this instance and they can give you a  good idea of what is available on the market while also helping you to know if there is anything that you can do to really benefit from what is in that location. When choosing the location for your property, take into account any public transportation lines, the quality of the area and the parking that you have available.



New tenants often make this mistake. They think that they can sell their lease to someone else. Leases often prohibit you from doing this and you will be responsible for the terms of the lease even if the new tenant happens to move in. You have to comply with the conditions of your lease at all times and you also have to make sure that you are aware of any rules regarding the sale or exchange of the lease as well. If you are able to transfer the lease then it helps to understand the process, so that you have a good get-out clause in place if you do happen to move on.


Breaking your Clause

Tenants often think that they have the ability to break or terminate their lease at any given moment. If you do terminate your lease then you will face a huge range of consequences and some of them can be devastating to your business. It’s important that you recognise the fact that when you have broken the lease, the landlord has the right to take action against you and this doesn’t look good for your business at all. If your landlord happens to break the lease then they will also face consequences, but before you take out the lease it’s a good idea to know what you can do if this happens. You’ll want to be protected in every way possible when you decide to rent a property, and this means being a bit more diligent in your approach to the lease and the fine print.

Expert Advice

Whenever you take out a lease on a rental property, you have to make sure that you do everything you can to get the advice you need. You also have to make sure that you are aware of the legal standing that you have with your lease and it may even be a good idea to have a lawyer look over the terms of the lease as well so you don’t get caught up in a loophole.

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