The risk hides in the clauses tenants skim.

Both sides of the table, and no safety net

Commercial leasing is adversarial by nature: a term that protects the landlord usually costs the tenant, and the reverse. I represent both, and that dual perspective is an advantage — a tenant benefits from counsel who knows how landlords draft, and a landlord benefits from counsel who knows where tenants push back. What does not change is that, unlike residential leasing, commercial leases carry essentially no implied warranties or statutory consumer protections. Courts treat the parties as sophisticated and enforce what they wrote, however punitive. That makes the drafting and the review the entire game.

Triple-net, gross, and the real cost of 'rent'

The headline rent rarely reflects what a tenant actually pays. In a triple-net (NNN) lease, favored by landlords, the tenant pays base rent plus its share of property taxes, insurance, and maintenance — costs that can rival the rent and that escalate over the term, shifting inflation risk to the tenant. A gross lease, favored by tenants for predictability, rolls those costs into a single rent figure the landlord absorbs. A modified-gross lease splits the difference, often with the tenant paying increases above a base-year figure. A tenant who negotiates only the base rent and ignores the net charges, escalations, and how operating expenses are computed has negotiated the smaller number.

CAM charges and the audit right that protects you

Common-area maintenance (CAM) charges are among the most disputed terms in commercial leasing. How CAM is defined, what may be passed through, whether capital expenditures are excluded or amortized, whether there are caps, and how charges are reconciled annually all determine real cost. Vague CAM provisions favor the landlord and surprise the tenant. A tenant should negotiate exclusions for major capital items and, critically, an audit right — the ability to have an accountant inspect the landlord's books to confirm that administrative salaries, marketing, and unrelated costs are not being funneled into CAM. Whether drafting or signing, the CAM clause deserves the scrutiny most parties reserve for the base rent.

The personal guaranty and the lease-versus-license distinction

Two provisions carry outsized risk. The personal guaranty asks an individual — usually the owner — to stand personally behind the company's lease, bypassing the corporate shield and putting personal assets at risk if the business fails; its scope and duration are negotiable, and 'good-guy' clauses that end personal liability once the tenant vacates properly and gives notice, or burn-down schedules that reduce exposure over time, are often available but rarely requested. Separately, a lease and a license are different animals: a lease grants an exclusive possessory estate with real security of tenure, so a default requires a formal court eviction; a license is a revocable permission to use space, terminable far more easily. Accepting a license when you needed a lease can leave a business without the stability it assumed.

Renewal, assignment, SNDAs, and the terms you need years from now

The provisions that matter most often only surface later: renewal options and how renewal rent is set; assignment and subletting rights if you sell the business or relocate; exclusivity and permitted-use clauses; and end-of-term obligations. A Subordination, Non-Disturbance and Attornment agreement (SNDA) protects a tenant if the landlord's lender forecloses — without it, a foreclosure can wipe out the lease. Holdover clauses commonly escalate rent to 150–200% if a tenant stays past expiration, and acceleration clauses can make the entire remaining term due on default. These terms should be negotiated at signing, when you have leverage, not at renewal, when you do not.

What usually goes wrong

For tenants, the most common failure is negotiating the base rent, ignoring the net charges and CAM, and signing an unlimited personal guaranty — then learning the true occupancy cost and personal exposure only after the business struggles. A frequent build-out trap: a 'white box' or tenant-improvement allowance defined too loosely, so the space stalls in contractor delays while rent runs on premises that cannot yet be used. For landlords, it is the loosely drafted lease that fails to define operating-expense pass-throughs or default remedies, leaving money uncollected. For both, it is mistaking a license for a lease and ending up with the wrong bundle of rights.

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