5 Legal Pitfalls Hidden in Commercial Lease Agreements — and How to Protect Your Business
For many business owners, signing a commercial lease is one of the biggest financial commitments they’ll ever make. Whether you’re opening your first retail storefront, expanding to a second office, or leasing warehouse space for your growing company, the lease agreement is more than just paperwork — it’s a legally binding contract that can determine the success or failure of your business.
Unfortunately, many tenants (and even some landlords) sign commercial leases without fully understanding the fine print. That oversight can lead to expensive surprises, legal disputes, or long-term obligations that are nearly impossible to escape.
Below are five common legal pitfalls found in commercial lease agreements — and practical steps you can take to protect your business interests before signing.
1. Unclear Maintenance and Repair Responsibilities
Commercial leases often contain vague or one-sided provisions about who handles property repairs and maintenance. The phrase “tenant responsible for all maintenance” might seem harmless — until the HVAC system fails, the parking lot needs resurfacing, or a plumbing issue requires thousands in emergency work.
Why It Matters:
Without clearly defined maintenance obligations, landlords can shift unexpected costs onto tenants, especially in multi-tenant buildings or triple-net (NNN) leases.
How to Protect Yourself:
* Ensure the lease clearly divides responsibility for structural vs. non-structural repairs.
* Ask that the landlord remain responsible for major systems such as roofing, electrical, and foundation.
* Include language requiring advance notice and documentation for any major repairs billed to the tenant.
A commercial lease attorney can help negotiate these terms and make sure the agreement is fair and compliant with Ohio contract law.
2. Hidden Costs in “Triple Net” (NNN) or “Full-Service” Leases
Commercial landlords often advertise leases as “triple net,” meaning tenants pay their share of property taxes, insurance, and common-area maintenance (CAM). However, many tenants discover later that these “extras” can fluctuate wildly year to year — sometimes doubling total occupancy costs.
Why It Matters:
Uncapped or poorly defined NNN expenses can destroy your budget, especially if you’re a new business.
How to Protect Yourself:
* Ask for an itemized breakdown of NNN or CAM fees.
* Negotiate caps or limits on annual increases.
* Require the landlord to provide supporting documentation (e.g., tax bills, invoices) for pass-through costs.
A commercial lease review attorney can identify vague or inflated expense clauses before you sign.
3. Lack of Flexibility for Early Termination or Business Changes
Every business evolves — and sometimes that means relocating, expanding, or downsizing. Yet many commercial leases lock tenants in for 3, 5, or even 10 years with no termination rights and strict assignment restrictions.
Why It Matters:
If your business model changes, or the location stops being profitable, you could still owe rent for the remainder of the term — even if you move out.
How to Protect Yourself:
* Negotiate an early termination clause with a reasonable buyout fee.
* Request sublease or assignment rights to transfer the lease if you sell the business or merge.
* Avoid clauses that require landlord consent “in sole discretion,” which can block future flexibility.
A well-drafted exit strategy can make the difference between a manageable adjustment and a financial disaster.
4. Ambiguous Renewal and Rent Escalation Clauses
Many tenants assume they’ll have the right to renew their lease under the same terms — but most renewal clauses allow landlords to raise rent substantially or impose new conditions. Worse, some “options to renew” are so vague they may be unenforceable.
Why It Matters:
If the lease doesn’t specify how rent increases are calculated, you could face an unexpected rate hike that makes staying in place unaffordable.
How to Protect Yourself:
* Require clear renewal terms in writing, including the formula or cap for rent adjustments.
* Add a specific timeline for notice — for example, “Tenant must notify Landlord 120 days before lease expiration.”
* Avoid any renewal provisions that say “at landlord’s discretion.”
An Ohio commercial lease lawyer can ensure renewal terms are enforceable and financially predictable.
5. Personal Guarantees That Risk Your Personal Assets
Even if your business operates through an LLC or corporation, many landlords will demand a personal guarantee — meaning you personally promise to pay the rent if your company defaults. This can put your home, savings, and other personal assets at risk.
Why It Matters:
A personal guarantee effectively eliminates the legal protection your business entity was designed to provide.
How to Protect Yourself:
* Negotiate a limited or “good-guy” guarantee that ends after a certain number of on-time payments or caps your exposure.
* If possible, offer a larger security deposit in exchange for a reduced or waived guarantee.
* Have a commercial lease attorney review all guarantee provisions to ensure you’re not taking on unnecessary risk.
Final Takeaway: Don’t Sign Blindly
A commercial lease is one of the most complex contracts a business owner will encounter. It governs not only rent, but also repairs, liability, insurance, compliance, signage, and more. The fine print can easily favor the landlord — unless you negotiate and understand your rights beforehand.
Before signing any lease, take the time to have it reviewed by an experienced commercial lease attorney who understands Ohio’s leasing laws, business structures, and landlord-tenant regulations. The cost of a legal review is minimal compared to the potential financial exposure of a bad lease.
How Our Law Firm Can Help
At New Ridge Law, we help business owners, landlords, and commercial tenants draft, review, and negotiate lease agreements tailored to their needs. From retail spaces to offices, industrial facilities, and mixed-use developments, we ensure every clause aligns with your goals and complies with Ohio law.
Our services include:
* Commercial lease drafting and negotiation
* Lease renewal and amendment review
* Sublease and assignment agreements
* Tenant and landlord dispute resolution
* Guidance on personal guarantees and liability protection
Whether you’re entering your first commercial lease or renewing a long-term space, we’ll help you protect your business interests and minimize legal risk.
📞 Contact us today to schedule a consultation with an Ohio commercial lease lawyer.