The 'Gotchas' in Office Leases

When a landlord offers you a standard real estate lease, it will often contain "gotchas" — provisions that may cost you a lot of money or headaches in the future. These include a variety of lease provisions that unfairly benefit the landlord at your expense.

Your real estate broker should spot these red flags and negotiate them out of a rental agreement. But since you’re ultimately responsible for meeting the terms of the lease, you need to ensure that it's free from any clauses or conditions that may unfairly affect your rent, restrict your use of the space, or result in an unexpected lease termination. For more details, read Negotiating an Office Lease for Your Business.

Some of the most common gotchas include:

• Giving the landlord unlimited authority to pass on increased operating costs, such as property taxes, building repairs, or insurance premiums to the tenant.=
• Requiring the tenant to pay any tax increases as a result of the landlord selling the building
• Allowing the landlord to terminate the lease for his or her convenience
• Including unreasonable disclaimers about the building or services provided to tenants
• Imposing severe restrictions on a tenant's ability to sublet the space
• Requiring the owners of a company to make personal guarantees in order to secure the property

If you find yourself in a fix, read Getting Out of a Commercial Real Estate Lease for advice on dealing with your landlord.