Commercial Leases… It’s In The Details

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Lease Agreement - it's all in the details
Lease Agreement – it’s all in the details

Commercial leases—they can be very overwhelming to read through, not only because of the legal jargon but because of the details on every topic they cover. But, the details are necessary to protect the property owner or landlord and the tenant, to make certain that there is no room for ambiguities or misinterpretation between the parties involved, and to ensure that all parties have the same understanding of a lease’s terms of agreement.

Some details a commercial lease should cover include the following:

  1. Lease Term – Is the lease for one, two … five years? Is there a restriction on how soon a tenant’s business can move in and operate once the lease is signed? Is there a renewal clause? Is there an exit clause? Is there an option to sublet? What are the terms of each?
  2. Area or square footage – Does the lease only apply to the square footage of the office or that the tenant’s business would occupy? What about common areas such as lobbies, hallways, washrooms, etc.—are these (or a percentage of these areas) governed by the lease a well?
  3. Parking, Signage – is signage included in the lease? Is there a designated parking area included in the lease?
  4. Renovation – Does the lease allow the tenant to have the space renovated to better suit their business needs? If so, what are the parameters and restrictions?
  5. Maintenance, Utilities and Repairs – Who is responsible for what repairs and operating costs? Is this to be a shared responsibility?
  6. Rate – What does the rent rate cover? When is it subject to rate increases?
  7. Insurances – what insurances are required by the lease and who is responsible?

Assumptions are not an option. If there are any ambiguities within a commercial lease, they need to be clarified and spelled out in detail. If any party does not agree to the details, an amendment can be written and initialed by both parties as part of the negotiation process.

Final tips:

  1. A commercial lease should be drafted, edited and finalized by professional underwriters and lawyers. (Believe it or not, there have been cases where commercial leases were drafted by the tenant only to later lead to lawsuits based on lack of details)1
  2. All details and fine print should be read.
  3. No party should sign anything until all can agree to everything.


DJ McGauley and Associates Inc. is your Office Move, Reconstruction and Reconfiguration Project Management Company of choice for the Toronto, GTA and surrounding areas. If an office move or reconstruction of your 2000 – 25,000sqft office space is a remote possibility, consider contacting us to arrange a no-obligation site meeting. We guarantee that by the end of that meeting you will know all that would be required to make your office move/reconstruction project a successful reality.

Call 416-239-1931, email, or visit our website to complete our contact form.


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