Commercial lease review: read it like the landlord's lawyer did.
Your commercial lease was drafted by the landlord’s attorney, for the landlord, and in Texas almost nothing in it is softened by statute; the document is the deal. A review before signing is a fraction of one month’s rent against a multi-year, six-figure obligation. Here is what the review actually looks for.
What the review looks for
The real rent. Base rent is the advertisement; triple-net pass-throughs, CAM definitions, and escalation mechanics are the price. The review pins down what can be charged, what can be audited, and what compounds.
The exit doors. Assignment and subletting standards, and the clause that bites hardest in this firm’s corner of the practice: change-of-control language that makes selling your company a lease default unless the landlord consents. Buyers find that clause in diligence; sellers should find it five years earlier, at signing.
The guaranty. Landlords open with a full-term personal guaranty. Caps, burn-offs tied to payment history, and entity-only liability are all regularly negotiated, and almost never offered unasked.
Default and remedies. Texas commercial landlords hold remedies tenants from other states don’t expect, lockout rights under the Property Code among them, and the lease can tune all of it. This section is why the calm pre-signing read exists.
The year-four clauses. Exclusive use, relocation, co-tenancy, operating hours, signage. None of them matters at signing. Each of them decides whether the space still fits the business you become. The full landlord’s-eye walkthrough is in what your landlord’s attorney already knows.
How this works with one relationship
Lease review and negotiation is contract work, and I handle it directly, at signing, at renewal, and inside transactions where the lease is one document among many. When a leasing matter turns into a real-estate dispute, an eviction fight, or a development-scale project, Scale LLP’s real estate bench takes it without you starting over. One relationship, one number: (682) 529-7177.
Common questions
Run the arithmetic. A commercial lease is commonly a five-to-ten-year obligation worth several hundred thousand dollars, drafted entirely by the landlord's side, and unlike residential leases it arrives with almost no statutory consumer protection; in commercial leasing, the document is the deal. A review costs a fraction of one month's rent and routinely changes terms worth many multiples of that: guaranty caps, CAM audit rights, assignment consent standards. It is among the clearest positive-expected-value purchases in business law.
The money mechanics beyond base rent: what triple-net actually passes through, whether CAM charges can be audited and capped, and how escalations compound. The exit and transfer terms: assignment and subletting standards, and whether a sale of your company counts as a prohibited transfer, a clause that has quietly complicated many Texas business sales. The personal guaranty: full-term or capped, and whether it burns off with good payment history. The default provisions, which in Texas can include remedies tenants do not expect. And the operational clauses, exclusive use, relocation, co-tenancy, that decide whether the space still works in year four.
Texas gives commercial landlords remedies that surprise tenants from other states, including, under the Property Code and within its conditions, changing the locks on a tenant behind on rent. The lease can modify these rules in either direction, which is precisely why the default-and-remedies section deserves adult attention before signing rather than a panicked read after a notice. If you are already in a default situation, from either side, the reading matters urgently.
Who carries the building's costs. In a gross lease the rent number approximates the real number. In a triple-net (NNN) lease the tenant also pays its share of taxes, insurance, and common-area maintenance, which means the advertised rent understates the true occupancy cost, sometimes substantially, and the CAM definition becomes one of the most negotiated clauses in the document. Neither structure is wrong. Signing one while budgeting for the other is.
Before signing, obviously, and at two moments owners forget: renewal, when the market and your leverage have both moved and the renewal notice deadlines are strict; and before selling your business, when the lease's change-of-control language determines whether your landlord holds a veto over your exit. The ten clauses that favor landlords by default are walked through in the companion essay, and they are the same ten at signing, at renewal, and in diligence.
Five years and six figures deserve one afternoon of adult reading.
The words you'll hear
If this goes further, these are the terms that will come up, from us or from the other side. Each one links to a fuller explanation.
- Commercial Lease
- A contract by which a property owner grants a tenant the right to use specified real property for commercial purposes for a defined term in exchange....
- Tenant Estoppel Certificate
- A signed statement by a tenant confirming key terms of a lease, rent amount, term, security deposit, lease modifications, claimed defaults, and other material facts, for....
- Guaranty Agreement
- A contract by which a guarantor agrees to be secondarily liable for the obligation of a primary obligor to a third party.
- Statute of Frauds
- The doctrine that certain categories of contracts are unenforceable unless evidenced by a writing signed by the party to be charged.
- Easement
- A non-possessory right to use another's real property for a defined purpose.
- Specific Performance
- Specific performance is a court order compelling a party to do what it promised rather than pay for not doing it.