Your first commercial lease: a checklist before you sign

Updated October 27, 2026 · General information, not legal advice.

A first commercial lease is a big commitment, and it works very differently from a residential lease. Fewer consumer protections apply, the documents are longer, and many costs sit outside the base rent. Use this checklist to slow down and look at the sections that matter most to small tenants.

How to use this guide: read it with your own lease or proposal open beside you. Lease labels and "standard" terms vary from property to property and from landlord to landlord, so treat everything here as a list of things to look for and questions to ask, not as a description of what your document says. When a section of your lease is unclear, ask the landlord or its representative to explain it in writing, and keep notes of what was agreed.

Money: what it will really cost

1. Total monthly occupancy cost. Base rent plus NNN or operating expenses, utilities, and anything else you pay. Compare totals, not base rents. See NNN explained.
2. Rent increases. How much, and how often. Fixed percentages and fixed dollar steps are common.
3. Upfront costs. First month's rent, security deposit, build-out costs, permits, furniture and equipment, signage, and deposits for utilities. The free move-in cost calculator helps add these up.
4. Free rent and allowances. When free rent applies, whether it covers only base rent or also NNN charges, and how the improvement allowance is paid out.
5. Operating expense history. Ask for the last two to three years of actual charges. See our CAM guide.

Space and use

6. Premises and square footage. Confirm the suite, the size, and how it is measured.
7. Permitted use. A narrow use clause can block you from adding services later. A broader one gives you room to grow.
8. Zoning and permits. Confirm your use is allowed at the property and that you can get the licenses and permits you need. Consider a permit contingency.
9. Condition at delivery. "As is" means you take the space as it stands. Spell out any landlord work and what systems must be in working order.
10. Exclusive use. If a competitor moving next door would hurt you, ask about an exclusive. See our exclusive use clause guide.

Responsibilities

11. Repairs and maintenance. Who handles HVAC, plumbing, electrical, roof, and structure, and who pays for replacement.
12. Insurance. The coverage types and limits you must carry, and whether you must name the landlord as additional insured.
13. Indemnity. Who is responsible for claims arising in your space and common areas.
14. Compliance with laws. Who pays for accessibility or code upgrades required during the lease.

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Risk and flexibility

15. Personal guarantee. How much you are personally on the hook for, and whether it can be capped or burn off. See personal guarantees.
16. Assignment and subletting. Can you sell the business and transfer the lease? Under what conditions can the landlord refuse?
17. Default and remedies. How much notice and time to cure you get before the landlord can act, and what remedies the landlord has.
18. Relocation clause. Some leases let the landlord move you to another space. If so, look at what the landlord must pay for.

End of the term

19. Renewal options. Do you have the right to stay? When must you exercise it, and how is rent set? See renewal negotiation.
20. Surrender and restoration. What condition the space must be in when you leave, and whether you must remove improvements.

Dates to calendar the day you sign

Commencement and rent start
Each rent increase
The renewal option window
The annual CAM reconciliation and any dispute deadline
Insurance certificate renewals

Our free lease dates checklist goes into each one.

Before you sign

Get the final version, not a redline in progress, and read it start to finish. Compare it against your letter of intent. Make sure every exhibit is attached: site plan, landlord's work, rules, and the guarantee. Keep a fully signed copy where you can find it.

Frequently asked questions

Are commercial leases negotiable for small tenants?

Often, yes. How much depends on the market and the property, but terms like free rent, allowances, guarantee limits, and caps are commonly discussed.

How long should a first lease be?

It depends on your business plan and build-out costs. Shorter terms keep flexibility. Longer terms can earn better concessions but increase commitment. Renewal options can give you both.

What is the biggest surprise for first-time tenants?

Often it is costs outside base rent, such as operating expense reconciliations and repairs a residential renter would never pay.