What to Know Before You Sign a Commercial Lease

Most commercial leases are written by the landlord's attorney, for the landlord. Meaning, by the time it lands on your desk, the risk allocation has already been decided, and it usually isn't in your favor. If you're leasing commercial space in Florida, here are a handful of clauses worth slowing down for before you sign.

Operating expense pass-throughs

In a triple-net lease, you're not just paying base rent—you're paying your share of taxes, insurance, and common area maintenance. The question isn't whether you'll pay these costs, it's whether you can negotiate a lease that caps them, requires the landlord to itemize them, and/or gives you the right to audit the numbers. Florida law does not require landlords to provide these protections by default, so without negotiating them into the lease, an "estimate" can become a line item that's difficult to underwrite and that you have no way to verify.

Use clauses and exclusivity

A narrow use clause can box you in if your business evolves. A broad one can let the landlord lease the unit next door to your direct competitor. Read this clause while keeping in mind where your business is headed over the term of the lease, not just where it is today.

Assignment and subletting

If your business changes shape (you bring on a partner, sell the company, need to downsize, etc.) can you assign the lease or sublet the space? Florida law does not require a landlord to act reasonably when withholding consent, so it's imperative to negotiate express language limiting the landlord's ability to withhold consent on these types of transfers. Without it, many leases give the landlord broad discretion here, which can trap you in a space that no longer makes sense for your business.

Default and cure periods

What happens if a payment is late? Florida Statute 83.20 provides a baseline 3-day notice requirement for nonpayment of rent, but lease-specific default provisions often override this with very short cure periods and very large remedies. This is a particularly important lease provision, and one that's often overlooked. A short cure period coupled with an aggressive acceleration clause could mean tenant exposure worth hundreds of thousands of dollars.

None of this means commercial leases are designed to be unfair. Most landlords are reasonable business owners, but the lease you're handed is a starting point, not a final offer. Strategic negotiation prior to locking into a long-term lease obligation that's secured by a personal guaranty can save years of painful and expensive litigation, made before signature, are far cheaper than the dispute that follows from skipping them.

*This article is for general information purposes only and does not constitute legal advice nor create any attorney-client relationship.