Lease Negotiation: Mistakes Tenants Often Make

Push for at least 30 days of early possession before your rent commencement date. The standard offer is often two weeks, but many landlords will extend this as long as you don't interfere with ongoing construction. In practice, cabling for phone and internet — and getting local network providers actually connected — can take longer than anticipated, with a two-week minimum being common on its own. You don't want to be paying for space while you're still getting the business set up to operate in it.

Confirm the building's operating expenses are grossed up to at least 95% occupancy when factoring your share. If this isn't in place and the building carries significant vacancy, you as a tenant could end up shouldering an above-standard percentage of total building expenses — the remaining tenants absorb costs that should be spread across a fuller building. This is one of the more technical lease provisions, and one of the easiest to overlook.

Markets vary nationally, but it's common in most major cities for landlords to offer months of free rent depending on lease term length. A useful way to help a landlord agree to this: offer to extend the term of the lease by the same number of months given in free rent up front.

Most landlord-drafted leases include a provision allowing the landlord to relocate your company within the building — or sometimes within the owner's broader portfolio — as long as they cover a portion of the moving costs. This can be extremely disruptive and costly to your operation, particularly if your current space has any qualities that genuinely matter to how you work. Push to strike this provision entirely, at least for the initial term. If the landlord won't remove it, negotiate the penalty and landlord-covered costs up significantly — enough that relocating you becomes a real deterrent rather than a low-cost option for them.

At the expiration of your lease, you may find your company needing to stay a little longer — your new space isn't ready, or a project underway makes a move too disruptive at that moment. Whatever the reason, the holdover provision in your lease dictates what you'll pay to stay past your expiration date.

After that 60-day window, the landlord could reasonably step the percentage up further — but by that point, your company should have accomplished whatever it needed to accomplish with regard to the move.

Have a Question About an Existing Lease?

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Frequently Asked Questions