Review guide · Commercial leases
How to review a commercial lease before you sign it
What an owner-operator should check in a commercial lease before signing: base rent escalators, CAM and operating-expense pass-throughs, renewal options and notice, assignment and subletting, personal guarantees, and build-out and restoration obligations.
A commercial lease is usually the longest and largest vendor agreement a small business signs, and the one where a review is least optional. The base rent is the headline; the money moves in the escalator, the operating-expense pass-throughs, the renewal option you must exercise on time, and the personal guarantee that follows the owner home.
This guide covers the business terms an owner should understand before the lease goes to counsel. A lease of this size should go to a real-estate attorney; the review tells you what to ask them about.
Who usually signs it: The owner, often personally as guarantor, on the landlord's form with a broker in the middle.
Central Ohio retail, warehouse and office leases are the agreements where Columbus owner-operators most often need both a review and an attorney. Vendor agreement review for Columbus businesses →
The clauses to check, in order
- 01
Rent escalation
Why it matters: Fixed annual increases or CPI-linked escalators compound over a five- or ten-year term; a 3% step on a long lease is a large number by year ten.
What to ask for: A stated schedule you have modeled over the full term, a CPI cap if CPI is used, and no escalation on the renewal option without a market check.
- 02
CAM, taxes and insurance pass-throughs
Why it matters: In a triple-net or modified-gross lease, common-area maintenance, property tax and insurance are billed on top of rent, reconciled annually, and defined by the landlord.
What to ask for: A capped annual increase on controllable CAM, exclusions for capital improvements and landlord overhead, audit rights, and the prior two years' reconciliations before signing.
- 03
Renewal option and notice
Why it matters: The right to renew is only a right if you exercise it in the window, often 6–12 months before expiry, in writing; miss it and the landlord sets the terms.
What to ask for: Renewal options at a defined rent or a fair-market mechanism, a reasonable notice window, and a landlord reminder obligation.
- 04
Personal guarantee
Why it matters: A full, unlimited personal guarantee makes the owner liable for the whole remaining term if the business fails.
What to ask for: A guarantee limited in amount (a number of months' rent) and in time (burning off after a period of on-time payment), or a letter of credit instead.
- 05
Assignment and subletting
Why it matters: Without the right to assign on a sale of the business or sublet unused space, the lease can block an exit or an acquisition.
What to ask for: Assignment to a buyer of the business and subletting with consent not unreasonably withheld, and release of the guarantor on a permitted assignment.
- 06
Build-out, restoration and holdover
Why it matters: Who pays for improvements, whether you must restore the premises at the end, and what rent applies if you stay a month too long can each cost more than a year of rent.
What to ask for: A defined tenant-improvement allowance, no restoration of landlord-approved improvements, and holdover at a modest premium rather than 150–200% of rent.
Before you sign: the checklist
- Model total occupancy cost over the full term: rent, escalators, pass-throughs.
- Ask for the last two years of CAM reconciliations.
- Write down the renewal-option notice window and put it in a calendar now.
- Read the guarantee and ask for a cap and a burn-off.
- Confirm assignment rights on a sale of the business.
- Read build-out, restoration and holdover before you negotiate the rent.
- Send the lease to a real-estate attorney with the review attached.
Run the interactive 12-point red-flag checklist → · Find the last day to give notice →
Have one of these on your desk?
Upload it and Sidecar returns a verdict, a 0–100 risk score, every clause above flagged with the text quoted, every date that can cost you, and the negotiation points with suggested wording. A Sidecar reviewer looks it over on request. The first review is free.
Questions
What is a triple-net (NNN) lease?
A lease where the tenant pays, on top of base rent, its share of the property taxes, insurance and common-area maintenance. The "net" charges are reconciled annually and are where most surprises in a commercial lease come from.
Should I sign a lease without a lawyer?
For a commercial lease of any size, no. Sidecar's review is the structured read that comes first: it flags the clauses above with the text quoted and what to ask for, so the time with counsel is spent on the terms that matter.
Does Sidecar review commercial leases?
Yes. Real-estate leases are one of the agreement types the review classifies. Upload the lease, the exhibits and any letter of intent, and the review reads them together. It is business decision support, not legal advice.
Clauses explained
Other agreement types
- Vendor master services agreements →
- SaaS subscription agreements →
- 3PL and fulfillment agreements →
- Agency and consulting agreements →
- Shopify app and ecommerce platform agreements →
- Equipment leases →
- Staffing and recruiting agreements →
- Freight and carrier agreements →
- Supplier and distribution agreements →
Definitions and negotiation guidance here are educational business decision support, not legal advice. Consult an attorney about how any clause applies to your own agreement.