Navigating Common Pitfalls in Commercial Leasing: Tips for Small Business Owners

Commercial leases are one of those things you don’t want to learn the hard way. For small business owners, signing a lease is often one of the first big financial commitments. It’s also one of the easiest places to get burned if you’re not careful.

Here’s the reality: landlords do this for a living. Most tenants don’t. The lease is written in their language, for their benefit. Your job is to level the playing field before you sign anything.

Here are the most common traps - and how to avoid them.

1. Overcommitting on Lease Terms

A five or ten year lease might seem like a solid commitment, but what happens if your business pivots - or tanks?

Tip: Push for flexibility. Try to negotiate a shorter initial term with renewal options. If the landlord insists on a long term, build in a termination clause or a sublease option so you have an out if needed.

2. Neglecting the Fine Print on CAM Charges

Common Area Maintenance (CAM) fees are where a lot of hidden costs live. Think landscaping, snow removal, parking lot maintenance - plus the landlord’s “admin fees.”

Tip: Get a detailed breakdown. Ask for historical CAM costs, and negotiate a cap on how much they can increase annually. Watch for vague language like “landlord’s discretion.”

3. Assuming the Space Comes Ready-to-Go

That freshly painted, furnished office in your head? It may not exist. Most commercial spaces are delivered “as-is,” which might mean demoed to the studs.

Tip: Spell out all buildout terms in the lease. If there’s a tenant improvement allowance (TIA), clarify what it covers, who’s managing the work, and what happens if it runs over budget.

4. Missing the Assignment and Subletting Restrictions

Need to relocate? Sell your business? If your lease bars subletting or assignment, you’re stuck - unless the landlord says otherwise.

Tip: Insist on reasonable language here. You don’t want to beg for permission or lose a deal because the lease is locked down tighter than the Hockey Hall of Fame vault.

5. Failing to Define “Use” Clearly

Most leases include a “use clause” that outlines what you’re allowed to do in the space. Too narrow, and you’ll be violating your lease the moment you expand services or shift your business model.

Tip: Keep the use clause as broad as possible or allow for changes (ie: seasonal menus). Future you will thank you.

6. Not Planning for Rent Increases

Initial rent might fit your budget, but what about year three? Four? Escalating rent can crush you if you don’t build it into your financial planning.

Tip: Understand how rent increases are structured - fixed bumps, CPI-based, or market adjustments. Try to negotiate a predictable schedule so you’re not blindsided.

7. Skipping the Legal Review

Too many small business owners treat the lease like a formality. It’s not. It’s a binding legal contract that can cost you dearly if you misread it - or don’t read it at all.

Tip: Always have a commercial real estate professional review the lease before you sign. This isn’t the time to DIY.

A commercial lease can be a launchpad or an anchor. The difference comes down to preparation and negotiation. Don’t rush. Don’t assume. And definitely don’t sign until you fully understand what you’re agreeing to.