A founder of a four-person creative agency in Jacksonville signed a five-year commercial lease last winter. The form looked standard. The base rent was in line with the market and the build-out allowance was fair. He almost signed it on the strength of those two numbers.
Buried in the boilerplate were six provisions that would have turned a manageable lease into a personal financial event: an unconditional personal guarantee that survived corporate dissolution, an uncapped CAM clause with no audit right, an open-ended escalation tied to the landlord's "actual operating costs," a relocation clause that let the landlord move the tenant to "comparable space" on 60 days' notice, a holdover provision at 200% of base rent plus consequential damages, and a surrender obligation requiring the premises be returned in "original condition" — including build-out the landlord had paid for.
None of those clauses were illegal. None were unusual on a first-draft commercial lease. They are the six places a tenant pays for not reading carefully. Here is what to look for and how to negotiate.
1. Unconditional Personal Guarantees
Most Florida landlords ask for a personal guarantee on commercial leases signed by an LLC or corporation. The default form is unconditional, perpetual, and joint and several across all guarantors. If the business closes in year three, the personal guarantee survives the closure. The landlord can pursue the founder for the remaining 24 months of rent, plus attorney's fees, regardless of what happens to the entity.
The negotiated version looks different. A burnoff provision releases the guarantor after 18 to 24 months of timely payments. A cap limits exposure to a fixed dollar amount or to remaining base rent only (excluding accelerated rent, CAM, and damages). A good-guy guaranty limits exposure to the period before the tenant vacates and surrenders the premises in proper condition — turning the guarantee into an incentive to give early notice rather than a perpetual liability.
Landlords will not volunteer any of these. They will agree to a meaningful subset of them when the tenant asks early in the negotiation. The single most common mistake commercial tenants make is treating the personal guarantee as a take-it-or-leave-it item.
2. Uncapped CAM Charges
CAM — common area maintenance — covers landscaping, parking lot maintenance, security, management fees, and a long list of building expenses passed through to tenants on top of base rent. A first-draft commercial lease usually defines CAM broadly enough to include capital improvements, management fees of 15% or more, and discretionary expenses the landlord controls completely.
Two negotiating points matter. First, an annual cap on controllable CAM — typically 3% to 5% over the prior year — limits how much the landlord can grow the pass-through. Uncontrollable items (real estate taxes, insurance, snow removal) are usually carved out, which is fair. Second, a tenant audit right with a defined window and a mechanism to recover overcharges plus interest disciplines the accounting. Without an audit right, you are signing up to pay whatever number the landlord puts on the annual reconciliation statement.
3. Open-Ended Escalation Clauses
Base rent escalation is normal in a commercial lease. The problem is the formula. The fair version is a fixed annual increase (2% to 3%) or a CPI-based increase with a cap. The unfair version is tied to the landlord's "actual operating costs," "market rate adjustments," or a CPI index with no ceiling and no floor.
A tenant who signs an uncapped CPI escalation in a moderate-inflation environment can wake up to 8% rent increases for years. Negotiate a cap on every escalation mechanism. If the landlord insists on CPI, ask for a floor of 0% and a cap of 4%. If the formula references "market rate," require the comparison to be documented with three appraisals from a defined geography.
4. Relocation Clauses
Many commercial leases reserve the landlord's right to move the tenant to "comparable space" elsewhere in the building or in the landlord's portfolio. On a first read, this seems abstract. In practice, a landlord exercises a relocation clause when a larger tenant wants the tenant's suite and is willing to pay a premium for it.
The default form lets the landlord define "comparable." The fix is to narrow that definition: same building, same floor or one above, equal or greater square footage, equal or better window line, and a tenant approval right that cannot be unreasonably withheld. The landlord should pay all relocation costs — moving expenses, IT cabling, signage replacement, stationery, and any lost business during the move. Without those provisions, a relocation clause is a one-way option the landlord can exercise at the tenant's expense.
5. Holdover Penalties
If the lease term ends and the tenant remains in possession — even for a few days while a new space is built out — the holdover clause kicks in. The default form sets holdover rent at 150% to 200% of base rent and adds consequential damages (lost profits from the landlord's next tenant). A two-week delay closing on a new lease can trigger weeks of penalty rent and a damages claim that exceeds the original annual rent.
Negotiate the holdover rate down to 125% to 150% of base rent. Cap the holdover period at 60 to 90 days. Strike the consequential damages language entirely, or limit it to actual documented damages. A tenant should never sign a lease where a minor delay on the back end can create six-figure exposure.
6. Surrender and Restoration Obligations
The surrender clause defines the condition the premises must be in when the lease ends. The default form often requires return in "original condition," which can mean removing the build-out the tenant paid to install and, in some forms, also removing build-out the landlord installed and paid for. Tenants discover this six months before lease expiration when they get a restoration estimate that costs more than the security deposit.
The fix is to define exactly what the tenant must remove and restore at the time of the lease — not at the time of surrender. The lease should attach a list of alterations the landlord agrees the tenant does not have to remove. The tenant should also negotiate the right to leave standard improvements (paint, carpet, basic partitions) in place. Without those carve-outs, surrender becomes a second negotiation under time pressure with no leverage.
How a Lease Review Pays for Itself
A commercial lease review is not a luxury item. On a five-year lease at $8,000 per month, the total contract value exceeds $480,000 before CAM, taxes, and escalation. The six provisions above can each independently add five or six figures of exposure. A focused attorney review identifies the negotiation points, drafts the redline language, and gives the tenant a workable counter-proposal. The fee is a rounding error against the contract.
The negotiation does not need to be combative. Landlords expect a redline on a first-draft commercial lease; they price the form assuming a sophisticated tenant will push back on three or four of the most expensive provisions. The tenant who signs as-is is the tenant who pays for the buffer the landlord built into the document.
For the procedural background on how I work through a commercial lease line by line, see the companion piece on how to read a commercial lease. For the residential equivalent — the six provisions a residential tenant should read before signing — see why you should have a lawyer review your lease before you sign.