20 Red Flags in Commercial Leases

Missing Audit Rights

Your lease does not include the right to audit the landlord's operating expense records. Without audit rights, you have no way to verify that CAM charges, tax pass-throughs, and other operating expenses are accurate and fairly allocated.

No CAM Cap

Your lease has no ceiling on annual increases to common area maintenance charges. Without a CAM cap, your landlord can raise your operating expenses by any amount each year, making it impossible to forecast occupancy costs accurately.

Missing CAM Exclusions

Your lease does not specify any exclusions from CAM charges, allowing the landlord to pass through virtually any expense as a common area maintenance cost. Without exclusions, capital improvements, legal fees, leasing commissions, and other non-recurring costs can be billed to tenants.

Cumulative CAM Cap

Your lease uses a cumulative CAM cap rather than a non-cumulative (annual) cap. While having any cap is better than none, a cumulative cap allows the landlord to bank unused increases from low-cost years and apply them all at once in a future year, creating unpredictable expense spikes.

No Gross-Up Provision

Your NNN lease lacks a gross-up provision, meaning operating expenses are calculated based on actual occupancy rather than full building occupancy. When the building is partially vacant, existing tenants end up subsidizing the landlord's share of costs for empty spaces.

Aggressive Holdover Rate

Your lease sets the holdover rent rate above 200% of the final monthly rent. While holdover provisions are standard, excessively high rates create enormous financial pressure and can be used as leverage against tenants who need even a brief extension while finalizing a new lease or relocation.

Missing Force Majeure Clause

Your lease does not contain a force majeure clause, leaving you potentially liable for rent and other obligations during unforeseeable events - including pandemics, natural disasters, and government-mandated closures - that are entirely outside your control.

No Renewal Option

Your lease does not include a renewal option, meaning you have no guaranteed right to extend your tenancy at the end of the lease term. Without a renewal option, the landlord can refuse to renew, demand significantly higher rent, or lease the space to another tenant regardless of your history as a reliable occupant.