Signing a commercial lease is a bigger commitment than many business owners expect. It isn’t just about agreeing a monthly rent. It’s a legal contract that can shape your costs and flexibility for years.

This guide explains what a commercial lease agreement involves, the key terms to understand and what to look out for before you sign.

What a commercial lease agreement covers

A commercial lease agreement sets out the terms that you cover you renting business premises from a landlord. It explains how long you can occupy the space, how much you pay and what responsibilities sit with you rather than the landlord.

Unlike residential tenancies, commercial leases tend to offer less protection to tenants. That makes it important to read the terms carefully and take advice if needed.

Lease length and commitment

Commercial leases often run for several years. Three, five or even ten year terms are common.

A longer lease can offer stability, especially if you want to stay in one place. It can also limit flexibility if your business changes direction or outgrows the space.

Check whether the lease includes a break clause. This allows you to end the agreement early under certain conditions, which can make a big difference if plans shift.

Rent and rent reviews

The lease will set out the rent and how often it’s paid. It will also explain how and when rent can increase.

Many leases include rent review clauses. These may link increases to market rates or a set formula. Understanding how reviews work helps you forecast future costs rather than focusing only on the first year’s rent.

Repairs and maintenance

One of the most important parts of a commercial lease is who is responsible for repairs.

Some leases require the tenant to cover internal repairs only. Others make the tenant responsible for structural repairs as well. This can include significant costs if the building needs work.

Clarify exactly what you’re agreeing to maintain before committing.

Service charges and additional costs

Rent isn’t the only outgoing.

Depending on the property, you may also pay service charges for shared areas, building insurance arranged by the landlord and contributions towards maintenance of communal facilities.

Understanding the full monthly cost avoids surprises after you move in.

Alterations and use of the property

Commercial leases often restrict how you can use the property and what changes you can make.

If you plan to alter the layout, install equipment or change the use of the space, check whether landlord consent is required. Some changes need written approval before you begin.

Legal advice and negotiation

Commercial leases are negotiable. Terms such as rent free periods, break clauses or repair obligations can sometimes be adjusted.

It’s common to involve a solicitor experienced in commercial property before signing. The cost of advice can be small compared to the financial impact of unfavourable terms over several years.

A commercial lease agreement isn’t something to rush. It sets the foundation for how your business operates from that space. Taking time to understand the details helps you avoid unnecessary risk and protects your cash flow.