In today's Freedom Friday blog and email newsletter, I want to talk about a topic that doesn't come up often enough with clients which have growing business and which are entering into commercial leases, and that's how one goes about negotiating a commercial lease and what problems one might encounter during that process.  In today's Freedom Friday blog and email newsletter, I'm answering the question, “What are common pitfalls of commercial leases in 2025?”

Many small business owners enter into commercial leases without reading them, or even having an attorney look at them.  They also think that they can't negotiate a commercial lease, and while that may be sometimes true, the lease may not be the best option for your small business.  Here are six (6) common pitfalls (or problems) to avoid with commercial leases:

1.  Ambiguous Lease Terms

The first common pitfall in a commercial lease is ambiguous lease terms.  A commercial lease should have precise and clear language and definitions. Ambiguous terms can be misunderstood and/or misinterpreted which can lead to unnecessary disputes.  You should carefully review a lease for any unclear or vague language, and then seek clarification from the landlord, if necessary.

2.    Insufficient Due Diligence

The second common pitfall in a commercial lease negotiation is insufficient due diligence.  As a potential tenant, you need to thoroughly research the property and the landlord before signing the lease.  You need to figure out the suitability of the property for your business needs, and make sure it is in good condition and complies with zoning and other local regulations.  You should also research the reputation and track record of the landlord.

3.    Failure to Negotiate Key Terms

The third common pitfall in a commercial lease negotiation is failure to negotiate key terms.  You should never accept the first lease offer without negotiating key terms including the rent and rent escalation clauses, duration of the lease, renewal options, tenant improvements, and build-out allowances (if applicable).  You should also review market rates for similar properties and make sure the lease transaction meets your business's long-term needs and plans for growth.

4.    Hidden Costs

The fourth common pitfall in a commercial lease is hidden costs.  Many commercial leases include expenses other than the base rent, e.g., common area maintenance (CAM) fees, property taxes, insurance, and utilities.  You need to factor these costs into your budget.  You need to review the lease for any additional costs or expenses, understand how they are calculated, and whether there are any limits.

5.    Subletting and Assignment Clauses

The fifth common pitfall in a commercial lease is subletting and assignment clauses.  At some point in time, you may need to sublet or assign your lease as your business grows or changes.  You need to review the lease for any restrictions on subletting or assigning your lease, and you need to negotiate for favorable terms that allow for flexibility in this regard because subletting or assigning the lease might provide advantages for your business down the road.

6.    Exit Strategies

The sixth common pitfall in a commercial lease is exit strategies (early termination).  You need to consider your options to end the lease early.  Look for early termination clauses and understand the notice periods and options for renewal.

Thinking about starting a small business?  Or maybe your small business is having issues with contracts, leases, business partners, collection issues, or experiencing other barriers to growth?  Please contact me at [email protected] to schedule a FREE strategy session.

For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/