The Biggest Mistakes I See in Commercial Leases
A tenant came to me after signing a five-year retail lease. The rent was fair — below market, actually. He’d negotiated hard on the base rate, felt good about the number, and signed. By year three, he was paying more in total occupancy costs than comparable tenants in the same center, and his landlord was fielding a dispute neither side wanted.
Not because the rent increased. Because the rest of the lease was never fully worked through — by either side.
This is the pattern I see most often, and it’s not a landlord-versus-tenant story. Both parties negotiated the headline number carefully and treated the remaining thirty pages as boilerplate. The result wasn’t a landlord “winning” at the tenant’s expense. It was a relationship that became adversarial by year three because nobody had been precise by year zero. That’s bad for the tenant’s budget and bad for the landlord, who now has a dispute, an audit request, and a tenant looking at their renewal option with suspicion.
Lease term is rarely the biggest issue
Everyone wants to talk about term — length, renewal options, the rate at which those options kick in. Those things matter, and they’re negotiated in the open. The provisions that actually determine how the lease performs over time are the ones in the definitions, the CAM mechanics, and the operational rights sections. These aren’t buried by design. They’re just dense enough that both sides tend to default to market-standard language without thinking through what it means for their specific situation.
Here’s where I’d focus, for either side of the table.
CAM language: clarity benefits everyone
Common Area Maintenance charges are contractually defined — and that definition varies significantly from lease to lease. For landlords, a well-drafted CAM provision means predictable, defensible cost recovery and fewer disputes down the line. For tenants, it means knowing what occupancy actually costs before you sign, not finding out at reconciliation.
CAM provisions commonly include management fees, administrative costs, and amortized capital improvements — these are legitimate components of operating a property and landlords are entitled to recover them. The issue isn’t whether these items belong in CAM. It’s whether they’re clearly defined, consistently applied, and understood by both parties at signing. A landlord who is upfront about what’s included avoids the year-three conversation where a tenant feels blindsided. A tenant who reads the definition carefully avoids being surprised.
The exclusion list matters here too — not as a tenant “win,” but as a clarity tool. A clear list of what’s outside CAM (costs covered by insurance, expenses tied to other tenants’ specific build-outs, capital items above an agreed threshold) reduces the likelihood of a dispute for everyone. Ambiguity is the actual enemy, not recovery itself.
Expense stops: a tool that works when both sides understand the baseline
An expense stop — where the landlord absorbs costs up to a baseline and the tenant covers increases above it — is a useful structure for sharing risk on a multi-year lease. It gives the landlord a predictable floor and the tenant predictable downside risk.
The key is making sure the baseline reflects a normal, stabilized year of operations. If it’s set during an unusual year — high vacancy, deferred maintenance — the structure stops working as intended for either party. A landlord who sets the base year accurately is protecting the long-term tenant relationship as much as the tenant’s budget. This is a place where getting the number right at signing prevents friction later.
Audit rights: protection for both sides
A tenant audit right is often framed as a tenant protection, but a well-structured audit right protects landlords too. It gives tenants confidence that charges are accurate, which reduces the chance of a tenant withholding payment or escalating a dispute based on suspicion rather than facts. Landlords who bill accurately — which is most landlords — have nothing to lose from a clear, reasonable audit provision with defined notice periods and scope.
What I look for is whether the provision is workable: reasonable notice, a defined scope, and a clear process if a discrepancy is found. A workable audit right is a relationship tool. An unworkable one just means the first dispute goes straight to a harder place.
There’s also a practical litigation point landlords sometimes miss. If a tenant has a real audit right and the landlord cooperates with it, most CAM disputes get resolved through that process — informally, with documentation, no lawyers involved. If a landlord resists a legitimate audit request or stonewalls on backup documentation, the tenant’s next move is often a lawsuit — and discovery in that lawsuit will require the landlord to produce the same records anyway, except now with legal fees, a damaged relationship, and a court involved. A workable audit right isn’t a concession. It’s often the cheapest way for a landlord to keep a CAM dispute out of litigation entirely.
Management fees: a legitimate cost, clearly stated
Property management is real work, and a management fee included in CAM — typically a percentage of gross revenues — compensates the landlord or their manager for that work. This is standard and appropriate. The question for both sides is simply whether the fee is disclosed, capped at a market-reasonable rate, and consistent with what similar properties charge. A landlord who is transparent about this fee from the start rarely has a problem with it later. A tenant who understands it going in can budget for it accurately.
Capital expenditures: protecting the asset, structured fairly
Major building systems — roofs, HVAC, parking lots — eventually need replacement, and that’s a legitimate cost of ownership that landlords often pass through as amortized charges over the useful life of the improvement. This protects the asset’s long-term value, which benefits the landlord’s investment and the tenant’s experience in the space (nobody wants to occupy a building with a failing roof).
The fair structuring question is about alignment: does the tenant’s share of the amortized cost roughly match the portion of the asset’s useful life they’ll actually occupy? A tenant signing a five-year lease shouldn’t necessarily fund the same share as a tenant signing fifteen years. Landlords who think through this proactively — capping pass-throughs, prorating based on lease term — sign easier deals and have fewer renewal-time arguments.
Assignment and subletting: flexibility and protection, for both sides
Business circumstances change — for tenants and for the buildings they occupy. A tenant may need to sell their business or relocate. A landlord has a legitimate interest in who occupies their property, particularly around creditworthiness and use.
“Consent not to be unreasonably withheld” is standard, but the more useful approach for both sides is defining what reasonable means upfront: creditworthiness standards, permitted use categories, and notice requirements. This gives tenants a clear path if circumstances change, and gives landlords confidence that any assignee will meet the standards they care about. Defined criteria, agreed at signing, prevent the situation from becoming a negotiation under pressure later.
What this means practically
The rent is the easy part — one number, negotiated in the open, understood by both sides from day one. The provisions above are where the lease either works smoothly for years or generates friction that nobody wanted. None of these provisions are inherently good or bad for either side. They’re tools. The outcome depends on whether both parties understood them at signing.
The tenant from the beginning of this piece and his landlord eventually worked through their dispute — but it took a renegotiation that could have been avoided with fifteen more minutes of attention at signing. That’s true whether you’re the one drafting the lease or the one reviewing it.
Read the lease. All of it. Both sides benefit from doing so.
Before signing a lease, understand where the money actually moves. Whether you’re a landlord drafting lease language or a tenant reviewing it, I’m happy to take a look at the financial provisions.