Commercial Lease Renewal Checklist for Tenants

☐ Operating Expenses and Base Year
Base year resets, gross-up assumptions, expense exclusions, and caps on controllable expenses can materially change occupancy costs over the renewal term.

☐ Free Rent and Net Effective Rate
Starting rent alone is misleading. Abatement, rent commencement, annual increases, and timing all determine the true net effective rent.

☐ Annual Rent Increases
Review whether increases are fixed, compounded, tied to CPI, or based on another formula. Small differences in escalation language can materially affect total lease cost.

☐ Tenant Improvement Allowance
Renewal improvement allowances are often limited unless negotiated. Define the scope of work, pricing, timing, landlord contribution, and responsibility for any cost overruns.

☐ Security Deposit Confirmation
Confirm the current security deposit amount, whether any portion can be reduced or returned, and whether the lease correctly reflects what the landlord is holding.

☐ Personal Guaranty or Lease Guaranty
A renewal may be an opportunity to reduce, limit, or potentially remove a personal guaranty or lease guaranty, especially if the tenant has a strong payment history.

☐ Option to Terminate
Early termination rights are rarely offered unless requested. Tenants should evaluate whether a termination option is appropriate based on future growth, contraction, ownership changes, or business uncertainty.

☐ Death and Disability Protection
For closely held businesses, medical practices, or leases backed by an individual guaranty, tenants should review whether death or disability provisions should limit future liability or trigger specific termination rights.

☐ ADA and Code Compliance Protections
Clarify responsibility for ADA compliance, path-of-travel upgrades, restrooms, parking, building systems, and code-triggered improvements so the tenant is not unexpectedly responsible for landlord-controlled areas.

☐ Operating Expense Caps and Audit Rights
Caps on controllable expenses and the right to audit landlord operating expense charges help protect tenants from unexpected long-term cost increases.

☐ HVAC, Utilities, and After-Hours Charges
Review HVAC hours, after-hours rates, utility billing, janitorial service, and any building service charges that may apply outside normal business hours.

☐ Parking, Signage, and Use Provisions
Parking rights, signage, permitted use, access, and building amenities are often left unchanged even when the tenant’s business needs have changed.

☐ Flexibility Rights
Expansion, contraction, relocation protection, renewal rights, and other flexibility provisions are rarely improved unless requested during the renewal negotiation.

☐ Assignment and Sublease Language
Restrictive assignment and sublease provisions can limit exit options, merger/acquisition flexibility, and the tenant’s ability to reduce unused space.

☐ Restoration and Surrender Language
Restoration obligations at lease expiration can create significant unexpected costs. Review removal obligations for cabling, improvements, signage, and specialty installations.

☐ Renewal Option Language
Renewal options should be reviewed carefully, including notice dates, fair market rent procedures, arbitration language, and whether concessions are included in the renewal rate.

☐ Landlord Default and Maintenance Obligations
Review the landlord’s obligations for building systems, roof, structure, common areas, elevators, parking areas, and code compliance.

☐ Market Alternatives
Before renewing, tenants should compare the renewal proposal against current market alternatives, concessions, relocation costs, and landlord competition.

☐ Broker Representation and Conflict of Interest
Tenants should understand who represents them in the renewal. A landlord’s broker represents the landlord’s interest, not the tenant’s.