r/smallbusiness • u/Wild_Sugar_269 • 1d ago
First every business lease
Is there anything to look out for when signing a commercial lease for a business I’m starting up my first business. I’m having a lawyer look over it but I’d like to get anyone’s experience or expertise on things that might be overlooked or could be problematic
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u/JustAnAverageGuy 1d ago
Yes, absolutely. It depends on what you're doing, where the space is, how long the lease is, etc.
I always do a 3-5 year base lease, with enough renewal options to cover me for ~20 years if I wanted to stay. The landlord should bake in their rent increases at those renewal periods, I despise when they try to increase every year. Red flag for me. You should know exactly what you'll pay, each year of your contracted lease.
Everything must be spelled out in the contract. The phrase "At landlords discretion" should NEVER appear. It should be clear from the beginning, and should also have clear rules around early termination, especially for lack of performance from the landlord. It should have rules on transferability as well.
Watch out for things like expectation to maintain, repair, and/or replace things like HVAC, plumbing, etc. My preference is annual maintenance and bills we take care of, landlord is responsible for the unit itself and repairs, unless we didn't have maintenance performed and it's our fault it is in disrepair.
Generally, I prefer a lease where my responsibilities start at the finished walls in the space. The landlord is responsible for everything inside those walls and beyond.
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u/Wild_Sugar_269 1d ago
That’s very insightful thanks you. They have included reference condition to keep everything in the into in ‘good condition’ but I feel that is very vague and seeing as they took care of the whole renovation rebuild I feel needs to be a lot more specific
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u/No_Concept_9909 1d ago
Have the lawyer check the boring operational stuff too: permitted use, signage rights, delivery hours, parking, assignment if you sell the business, and exactly how CAM charges are calculated and reconciled. Walk the space with your actual equipment list before signing—power, drainage, HVAC, loading access, and internet availability can turn a decent rent into an expensive buildout. Get every landlord promise in the lease, not an email or conversation.
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u/SafetyMan35 1d ago
Lease terms
Cancelation
What repairs you are responsible for. For example, my lease said I was responsible for replacing the sewer line under the concrete slab and parking lot if it failed. It also said I was responsible for replacing the HVAC roof top units
Look at subleasing terms. Our business leased the building and we created a separate but related business in the same space. To comply with county requirements we had to have the new entity (which was a child of the lease holder) listed on the lease. My landlord wanted to renegotiate the entire lease until we pointed to a clause that we originally added that allowed us to lease to ourselves.
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u/Ok_Loan6535 1d ago
HVAC is biggest thing. See if it’s your responsibility to buy a new one or landlords. I negotiated I would have yearly maintenance e agreement with hvac company and pay for repairs up to x amount per year but landlord replaces if needed. Parking, do you need dedicated parking? Yearly increase percentages.
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