Lease & Document Risk Guide
Lease Red Flag Checklist: 9 Clauses to Check Before You Sign
2026-07-30 · By Greg, Manages a 9-property mixed commercial and residential portfolio.
Most lease problems do not show up on the first page. They sit in a clause nobody reads twice, and they only surface when you are trying to sell, trying to lease a new unit, or trying to figure out why the numbers do not match what you expected. These nine show up often enough to check on every lease, residential or commercial, before you sign.
1. Right of First Offer
If a commercial tenant holds this right, they get a contractual chance to buy the building before it goes to anyone else. Miss it during a sale and a signed contract with a different buyer can be legally unwound. Check every commercial lease for this before listing a property.
2. Exclusivity clauses
In a multi-tenant building, one tenant can hold the exclusive right to operate a certain type of business there. Lease a new unit to a similar business without checking first and the existing tenant can bring a breach-of-lease claim against you.
3. CAM base year provisions
Common area maintenance, or CAM, is the shared cost of upkeep a commercial tenant reimburses the landlord for. If the property is reassessed at a higher value after the lease is signed, the landlord often cannot pass the full increased tax burden to the tenant. That gap, called CAM leakage, can quietly erode tens of thousands of dollars in net operating income a year.
4. Rent-increase clauses with no cap
Some leases allow a mid-lease rent increase with no stated ceiling and no defined trigger. On a residential lease this can catch a tenant off guard well before renewal. On a commercial lease it can undermine the numbers a buyer or lender ran to approve the deal in the first place.
5. Entry notice requirements
Most states require a landlord to give real advance notice before entering an occupied unit, typically 24 to 48 hours in writing. A lease that only requires notice "by text message, no confirmation required" is thinner protection than it looks and worth flagging to both sides before signing.
6. Insurance requirements that do not match your actual coverage
A lease can require a tenant (or a landlord, in a commercial deal) to carry a specific type or amount of insurance. If nobody checks the actual policy against what the lease requires, a real gap can go unnoticed until a claim gets denied for exactly that reason.
7. Assignment and subletting restrictions
A lease silent on assignment and subletting can leave a landlord with a tenant's replacement they never approved, or leave a tenant unable to exit a lease early without a costly workaround. Worth a plain-language clause either way, not silence.
8. Percentage rent and reporting requirements
Common in retail and some commercial leases: rent that includes a percentage of the tenant's sales above a set threshold, based on sales figures the tenant self-reports. A lease with no real audit right leaves a landlord with no way to verify those numbers are accurate.
9. Maintenance and repair responsibility splits
Who fixes the roof. Who fixes the parking lot. Who pays for a major system failure versus routine upkeep. Leases that leave this vague are where landlord-tenant disputes over a single expensive repair usually start.
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