CREparserLandlord-favourable lease clauses: 8 risk flags to look for in a commercial lease
In short: the clauses that hurt tenants most are rarely the headline rent. They are relocation rights, steep holdover rent, expense caps with large exclusions, conditional options, forfeitable allowances, broad assignment controls, one-sided default terms and limits on the landlord’s liability. Read for each one, quote the wording, and note what it would cost you.
This guide is written from the tenant’s side; a landlord reading it gets the same list of points the other side will push on. It is not legal advice.
1. Relocation rights
What it looks like: “Landlord may, no more than once during the Term, relocate Tenant to other premises in the Building of comparable size and quality.”
Why it matters: even when the landlord pays the moving costs, a move disrupts the business and can cost the tenant its floor, frontage or identity in the building. In the fictional Harborview Tower sample lease, a full-floor tenant could be moved anywhere in the building on 90 days’ notice.
What tenants ask for: delete it, or limit it: a floor at or above the current one, contiguous space, no relocation in the last years of the term, and all costs covered, including new stationery and signage.
2. Holdover rent
What it looks like: “monthly rent equal to one hundred fifty percent (150%) of the Base Rent in effect at expiration for the first sixty (60) days, and two hundred percent (200%) thereafter”, sometimes with liability for the landlord’s consequential damages.
Why it matters: consequential damages can include a lost replacement lease, which can dwarf the rent.
What tenants ask for: a lower percentage, a longer grace period, and no consequential damages until after written notice that a new tenant is waiting.
3. Expense caps with large exclusions
What it looks like: a cap on increases in operating expenses that excludes insurance, utilities, taxes, snow removal and security.
Why it matters: those excluded lines are usually the most volatile, so the cap covers the part of the bill that was least likely to rise.
What tenants ask for: a cap on all controllable expenses, a clear definition of “controllable”, and audit rights with a reasonable window.
4. Conditional renewal options
What it looks like: an option that is “personal to the original Tenant and its permitted transferees” and “may be exercised only if Tenant then occupies at least seventy-five percent (75%) of the Premises”.
Why it matters: subleasing part of the space, or assigning the lease in a sale of the business, can quietly kill the option.
What tenants ask for: options that pass to permitted transferees, and occupancy conditions that ignore subleases to affiliates.
5. Allowances that expire
What it looks like: “Any portion of the Allowance not requested by [date] shall be forfeited.”
Why it matters: it’s easy to miss when the build-out runs late. In the sample lease, any part of a $1,058,250 allowance not requested by July 1, 2026 is lost.
What tenants ask for: a longer deadline, the right to use leftover allowance against rent, or a deadline that counts from substantial completion rather than commencement. Put the date on the critical dates list.
6. Assignment and subletting controls
What it looks like: consent “in Landlord’s sole discretion”, a recapture right that lets the landlord take the space back when you ask to sublet, and a large share of any sublease profit.
Why it matters: it limits your ability to shrink, sell the business or exit.
What tenants ask for: consent “not to be unreasonably withheld, conditioned or delayed”, permitted transfers to affiliates and successors without consent, and no recapture for small sublets.
7. One-sided defaults and remedies
What it looks like: short cure periods for the tenant, no cure for the landlord, cross-defaults with other leases, and acceleration of all future rent.
Why it matters: a minor or disputed issue can become a default with outsized consequences.
What tenants ask for: written notice and a cure period before any default, longer periods for non-monetary issues, and a duty on the landlord to mitigate.
8. Limits on the landlord’s liability
What it looks like: “Landlord’s liability under this Lease shall be limited to Landlord’s interest in the Building.”
Why it matters: if the building is heavily mortgaged, a judgment against the landlord may be worth little.
What tenants ask for: liability that includes rents, sale and insurance proceeds, and offset rights if the landlord fails to pay the allowance.
How to record a risk flag
For each flag, write down:
- a short name and a severity: high, medium or low
- the quoted clause, with its section and page
- why it matters for this deal, in one or two sentences
- what you would ask for, if you’re still negotiating
Keep the flags with the lease abstract, so whoever reads the terms also sees the risks.
Find the risks with their clauses
CREparser abstracts a commercial lease inside Claude and flags tenant-unfavourable or unusual clauses, ranked by severity, each linked to its highlighted clause in the lease.
Try it on the sample office lease, which includes a relocation right, a 150%/200% holdover and an expense cap with exclusions. Your first 5 documents are free.