Lease Negotiation Checklist

A commercial lease is a five-to-ten-year financial commitment, and the terms that define your occupancy cost are negotiated before the offer is signed — not after. Whether you're leasing office, retail, or industrial across the GTA, here's the checklist I run on every deal to protect my client's position.

The economic terms

• Base rent — quoted per sq ft/yr, gross or NNN; model the full occupancy cost.
• Lease structure — gross, modified gross, or triple-net; know what's included.
• Term length — matched to your business plan and growth.
• Escalations — fixed bumps or CPI; cap the annual increase where possible.
• Free rent — negotiate an abatement period up front.
• Tenant improvement (TI) allowance — per sq ft toward your fit-out; often where the real value is.
• Security deposit / letter of credit — amount and form.

The option and flexibility terms

• Renewal options — how many, at what rent (fixed or market), and the notice window.
• Expansion option — the right to take adjacent space if it opens up.
• Contraction / early termination right — with or without a penalty.
• Assignment and subletting rights — what you need to assign or sublease.
• Exclusivity (retail) — protection from direct competitors in the same centre.
• Co-tenancy (retail) — rent tied to anchor occupancy.

“The renewal option with a capped rent is the single most overlooked term in a commercial lease. It's your insurance against the next market.”

— Hiren Patoliya

The operational and risk terms

• Personal guarantee — scope, cap, and sunset; negotiate it down where you can.
• Holdover rent — the rate if you stay past term; keep it capped, not 200%.
• Repairs and maintenance — who owns the roof, structure, HVAC, and parking lot.
• Insurance and indemnity — align with your broker before signing.
• Signage rights — what you can put up, where, and for how long.
• Parking — ratio, cost, and reserved vs. shared.

Run the checklist before you sign

Every one of these terms is negotiable before the lease is signed, and almost none are negotiable after. As your tenant rep, I run this checklist on your behalf — and because the landlord pays the commission, you get the representation at no cost. Send me your lease offer or renewal letter and I'll tell you what's missing.