Why Should I Ask an Attorney to Review My Lease?

Most people leasing commercial space for the first time get comfortable at exactly the wrong moment. The LOI is signed, everybody is friendly, the terms look good, the price works, and everyone is ready to get on with business. Then a lease arrives from the landlord's attorney and it is forty five pages long.

That is the moment to slow down, not speed up.

The LOI Is an Offer, Not a Contract

When a broker helps you lease commercial space, the first document is an LOI, which stands for letter of intent. It is an offer letter.

Residential works differently. When someone buys a house they sign a purchase and sale agreement, a PASA, and that document is the contract. The price, the earnest money deposit, the closing date, the inspections, all of it lives in one binding agreement. Many residential agents have never seen an LOI because they never need one.

In commercial real estate, the LOI gets negotiated, redlined, sent back and forth several times, and signed at the end. Even then it is not a binding contract. That surprises people. I have watched a tenant negotiate for weeks, get every term they wanted, and lose the space to an offer that came in behind them. A landlord can also be negotiating with you and another tenant at the same time and simply choose the other one. Nothing is done until the documents are fully executed, notarized, and the security deposit and first month's rent have actually changed hands.

I tell my clients that on day one so the disappointment never takes them by surprise.

From a Page and a Half to Sixty Pages

My LOIs run about a page and a half. They cover the price, the term, the escalations, the triple nets, the tenant improvements, the landlord's work, and who the brokers are. Commission often lives in a separate agreement rather than in the lease itself, so know which document controls.

The shortest lease I have ever seen was around twenty five pages. The longest ran between forty five and sixty. Everything that did not fit in that page and a half now has a paragraph, and every paragraph has a consequence.

At this point the landlord's attorney is writing a document whose purpose is to protect the landlord for the full term of the lease. That is the job they were hired to do. Nobody at that table is doing the same work for you unless you hire someone.

Your Broker Is Not Allowed to Write Your Lease

Your broker or agent is not in a position to write a lease, and it is illegal for us to do it. Unless your agent went to law school and holds a license to practice law, drafting that document is outside their capacity. We know the market, the deal, and the negotiating posture. We do not know every consequence of every clause across a five or ten year term.

An attorney does. An attorney can put language on the page that pushes back on the landlord's attorney and forces a conversation about what is actually fair. That is the difference between a lease that was negotiated and a lease that was simply handed to you.

Read It Out Loud Before You Sign Anything

Here is the step almost nobody takes. Get the lease, print all forty five pages, and read it out loud. If you have a partner, a spouse, a friend, a grandma, or a border collie, sit them down and make them listen while you read the whole thing.

Reading out loud slows you down. You cannot skim out loud. Read every word as if you have never seen the document before. Every time something makes you stop and think, mark it. Those are the things that make you go hmm, and that old song had it right.

Then ask your broker to read it too and point out what they see. Just understand the limitation. It is hard for an agent to give that document the attention it deserves, because it is not their profession and they are usually juggling three other deals. Their opinion is worth having. It is not worth relying on alone. Six months or three years from now the phone will ring and it will be you, saying, could you look at that old lease again, because they are telling me I owe for something and I do not think it is in there. Then we go find it. That is why the reading happens before the signing, not after.

What Is Actually in Those Pages

Permitted use and exclusivity. Your use clause should cover what your business will realistically sell, and exclusivity should block a neighbor from selling it too. If you are a chicken wing restaurant, you do not want the shop two doors down selling chicken strips, chicken fingers, or nuggets. You may add those to your menu later, and a narrow use clause with no exclusivity lets your neighbor stop you. The same logic applies to two nail salons splitting the same customers in one center.

Insurance. Landlords sometimes put astronomical insurance requirements in a lease, and I have seen levels that would cost a tenant thousands of extra dollars a year. That is a number to negotiate, not a number to accept.

Maintenance, repairs, and replacement. In a triple net lease the landlord is generally responsible only for the roof and the exterior walls. Everything else belongs to the tenant, and replacement is the part everyone misses. I can tell you that in very nearly every triple net lease, the HVAC replacement belongs to the tenant. We can push back and ask the landlord to take it. Expect to lose that one.

The delivery condition. If your broker does not require that the HVAC and the other systems are in good working order at delivery, the landlord is completely hands off the day after you sign. A dead rooftop unit in February is your bill, and it will not be a small one.

Assignment and subletting. Say you are two or three years into a five year lease and life changes. You get hit by a bus, you win the lottery, you have a health issue, or the business simply is not what you thought. You need to sublease or assign, and most leases require the landlord's permission. The question worth asking is whether the landlord can veto every candidate you bring, or make the process so difficult that you cannot get out. Some landlords will accept another tenant in the same use without much trouble. A completely different use will have to jump through hoops, and sometimes the answer is simply no.

Renewal notice. This one quietly ends businesses. Many leases require you to notify the landlord thirty days, ninety days, or even one hundred eighty days before the term ends to tell them whether you are staying. The notice period exists so they can start marketing the space. Miss the window and you may lose your right to renew. The lease I read this week said that two late payments would cost the tenant the opportunity to renew at all. That is not a footnote. That is the end of your location. Somebody needs to be watching these dates for you.

Noise and hours. If your business makes noise, runs deliveries early, or stays open late, the lease needs to permit it. Get it in writing before you build a business around it.

Rules and HOA documents. In a business condo or a property governed by an association, the landlord has to give you those documents before you sign. If you spend fifty thousand or two hundred thousand dollars remodeling and the association does not allow your use, you have a very expensive problem and no recourse.

The Guaranty Is Not a Formality

A client of mine leased a retail space for his wife's shop. Then a divorce came through, she lost her motivation for the business, and she stopped paying the rent. The landlord sued both of them for the remainder of the lease. Both of them. That is what a personal guaranty does.

Here is the part people do not expect. The landlord can lease the space to somebody else and still come after the original tenant for the balance, because the landlord had to pay a broker to find the replacement, and because the lease gave them the right to. Being re-let does not automatically release you. The language inside the guaranty decides that, and most tenants have never read it.

Do the Math Yourself

Before anyone signs, run the numbers on paper. Not because anyone is trying to mislead you, but because mistakes happen in leases, and the tenant is the last line of defense.

Start with the base rent. Multiply the rate per square foot by the actual square footage of the unit, then check it against the monthly number in the lease. Confirm the square footage the rent is based on matches what you measured or what the survey shows, because a small difference compounds over a five or ten year term.

Then check the escalations. A common and expensive error is an escalation applied to the wrong base, or applied to base rent plus triple nets instead of to base rent only. Escalations should generally be calculated annually on the base rent amount alone. Read each year of the schedule and verify the math year by year rather than assuming the summary page is correct. If the lease shows a three percent annual increase, year three should reflect two increases, not one, and not four.

Then do the triple nets. CAM, taxes, and insurance are usually quoted per square foot, and they are estimates that get reconciled later. Multiply the per square foot figure by your square footage, add it to base rent, and compare that total against what you were told during negotiations. Ask what the property actually spent last year, and ask whether the CAM is capped. An uncapped CAM estimate is a number that can grow every year of your term.

Finally, check the credits and allowances. Free rent months, TI allowances, and moving allowances each have a dollar value, and it is worth confirming that they appear in the same place in the lease that they appeared in the LOI.

If a number does not tie out, ask. Every time. A clean lease with a math error in it is still your lease.

Where a Broker Earns Their Keep

None of this means your broker is useless in the lease phase. A good agent brings something an attorney does not, which is direct experience with what landlords in that market actually accept. I had exactly that conversation with an attorney this week. He is going to do the best thing he can for his client, and my job is to tell that client what is realistic. You do not want to pay for a new HVAC system. Understood, and we will push back on it. I am also telling you that the odds are you keep that obligation.

That combination is the point. The attorney knows the consequences. The broker knows the market. You want both of them reading the same document.

Why We Still Read Every Word

Most leases do not start from a blank page. They start from a version of the same landlord's document that has been refined over many deals, and sometimes from an earlier draft prepared for a different property or a different tenant. That is normal practice in commercial leasing, and it is not a knock on anyone's work. It is simply how law firms build documents efficiently.

It is also exactly why we read the lease line by line.

When language carries over from previous work, obligations can carry over with it. I read a lease this week that made the tenant responsible for plate glass in a unit that has no glass at all. We asked for that to be removed for two reasons. First, we want everyone at the table to know the document was read carefully. Second, we do not want that obligation sitting in the lease years later when the space is remodeled and glass appears, leaving the tenant responsible for something they never asked for and do not need.

Finding one leftover line is not a reason to distrust your landlord or their attorney. It is a reason to read the document before you sign it.

Even a Signed Contract Deserves a Reader

I had a conversation recently with a salesman at a solar company who told me I was being unprofessional because I was asking questions about a contract his company had already signed. He wanted to know how long I had even been in real estate and why I would question something already signed.

I did not care for being called names. But later I thought, actually, sir, my job in real estate is to help people read contracts, signed and unsigned. Unsigned is the easy version because you still have room to negotiate. Signed is harder, because now you are establishing what your rights and your responsibilities actually are. Either way, you read it before, during, and after.

The Bottom Line

The LOI is a handshake. The lease is the marriage, and it is the document that gets enforced on your worst day. Hire an attorney who works for you, read it out loud, ask questions until you understand the answers, and do not let anyone rush you because the landlord is ready to sign. If you are looking at commercial space in Jacksonville or anywhere in Northeast Florida and want to know what to watch for before you get to the lease, call me at 904-903-8755. I will tell you what I would do in your position.

Melesia Ziller, Broker/Owner
Clearpath Commercial, Jacksonville and Northeast Florida