Commercial lease

How to review a commercial lease agreement

In a commercial lease, check the rent and how it can increase, the security deposit, the term with break and renewal rights, and who pays for repairs and service charges. The biggest exposure usually sits in uncapped indexation, personal guarantees and repair obligations at the end of the term.

Review your contractUpdated October 16, 2026

Legal background

  • Local landlord and tenant law, including statutory renewal and registration rules
  • Rules on security deposits and guarantees
  • Consumer rules do not usually apply to business leases

Main risks

  1. 01Uncapped rent reviews

    Rent can be raised by an index with no ceiling, or upwards-only reviews to market level.

  2. 02No break option

    Long fixed term with no tenant break right or exit penalty, leaving you paying for space you no longer need.

  3. 03Repairs and dilapidations

    Full repairing obligations regardless of the condition at the start, and open-ended restoration duties on exit.

  4. 04Service charge and costs pass-through

    No budget, audit rights or cap on service charge, insurance and management fees.

  5. 05Security deposit and guarantees

    Large deposit with unclear return conditions, or a personal guarantee covering the whole term.

  6. 06Assignment and subletting limits

    Landlord consent may be withheld for any reason, which blocks exit by assigning or subletting.

Example finding and redline

Clause in the contract

“Rent shall be increased annually by the higher of 5% and the consumer price index.”

Why it is risky

Upwards-only indexation with a floor means rent rises even when inflation is low.

Suggested fix

“Rent shall be increased annually by the consumer price index, capped at 3% per year.”

Pre-signing checklist

  • Premises, area and permitted use are defined with a plan
  • Term, renewal rights and break options
  • Rent, VAT, indexation and any rent-free period
  • Deposit amount and return conditions, guarantees
  • Who carries repairs, insurance and service charge, with caps and audit rights
  • Assignment, subletting and change-of-control rules
  • Condition at start (schedule of condition) and obligations at exit
  • Registration or formalities required by local law

FAQ

What is a break clause?
A right for one or both parties to end the lease early on notice, usually at set dates. Check the notice period and any conditions, such as paying rent up to date, which can make the break unusable.
Is a personal guarantee normal?
Landlords often ask for one from small companies. If you must give one, try to limit the amount and duration, and release it on assignment or after a fixed period.

This material is for general information and is not legal advice. Rules differ by jurisdiction; have a lawyer review any significant contract before you sign.