Leasing premises is a big moment for any business – whether it’s opening your first shop, expanding to a second office, or moving into something more professional. It might seem like a simple matter of signing a lease and picking up the keys, but commercial leases are legal contracts and hidden within them can be clauses that leave you with expensive responsibilities or locked into inflexible arrangements which could cost you both time and money.

Here I share 10 key points I always advise small and medium-sized business owners to think about before they commit.

1. Understand what you’re signing up for

Commercial leases aren’t all built the same. One of the most common – and most misunderstood – is the Full Repairing and Insuring lease, often called an ‘FRI lease’. This kind of lease places a significant amount of responsibility on you as the tenant. You might be liable for the repair of structural issues, external elements like roofs and gutters, or even the entire insurance cost for the building. That means if the roof leaks or the wiring needs replacing, the cost could fall on you – even if you didn’t cause the damage. Before you sign, make sure you understand the full scope of your obligations, not just the rent amount. A good solicitor can help you interpret the legal jargon and spot hidden liabilities.

2. Know where you stand at the end of the lease

What happens when your lease expires? Can you renew it automatically, or do you have to move out? This largely depends on whether the lease is ‘inside’ or ‘outside’ the security of tenure provisions of the Landlord and Tenant Act 1954. If it’s contracted out of the Act, you’ll have no legal right to stay at the property when the term ends, even if you’ve been a model tenant or invested heavily in the space. This is something to check early on – ideally before heads of terms are agreed. If you want the flexibility to stay long-term, make sure your lease reflects that.

3. Flexibility matters: break clauses, assignment & subletting

Business needs can change quickly. You might grow faster than expected, downsize, or pivot in a new direction. That’s why flexibility within a lease is crucial. A break clause gives you the right to exit the lease early, often on a fixed date, provided certain conditions are met. You should also look at whether you’re allowed to assign the lease (transfer it to another tenant) or sublet part of the space. Some landlords restrict this heavily, while others allow it with consent. Having options like these could save your business from being stuck with overheads you no longer need or can’t afford.

4. Protect yourself with a schedule of condition

A ‘schedule of condition’ is a simple but powerful tool. It’s a photographic and/or written record of the property’s condition at the time you take it on. Why does that matter? Because many leases require you to return the property in good repair – and without this record, that could mean paying to fix problems that were already there when you moved in. Cracked tiles, damp patches, uneven flooring – these things can cost thousands to put right. A schedule of condition limits your liability to the condition at the start of the lease, helping to avoid nasty surprises at the end.

5. Watch out for service charges

If your unit is part of a larger building or development, you may be expected to pay a share of communal costs – known as a service charge. These can include things like cleaning, security, landscaping, maintenance, or even major structural repairs. Sometimes these costs are reasonable, other times they’re a blank cheque. I’ve seen cases where tenants were hit with unexpected bills running into thousands of pounds. Always ask for a service charge cap if possible and request a copy of recent service charge accounts so you can see what’s been charged in the past. Transparency is key – don’t accept vague or open-ended obligations.

6. Understand how rent reviews work

Most leases include rent reviews, which typically occur every three to five years. These reviews can have a significant impact on your overheads, so it’s important to understand how they work. Many leases include ‘upward-only’ rent reviews – meaning your rent can go up, but never down, even if market conditions deteriorate. Some are based on open market rent, while others are indexed to inflation. Either way, you should know when the review will take place, how it’s calculated, and whether you have a say in the process. Failing to prepare for a rent increase can cause serious cash flow issues for a growing business.

7. Beware of personal guarantees

If your business is set up as a limited company – which protects you from personal liability -that protection can be eroded if the landlord asks for a personal guarantee. This is a legal commitment that says you, personally, will cover the rent or other lease obligations if your company can’t. In some cases, landlords may instead ask for a rent deposit. Either way, it’s a risk to consider carefully. A personal guarantee means your own savings, assets or even your home could be on the line. Never agree to one lightly and always explore alternatives before signing.

8. Check you’re allowed to use the space as intended

This might seem obvious, but it is often assumed or overlooked. Just because a unit looks perfect for your café, showroom or warehouse does not mean you’re legally allowed to use it that way. The lease must permit your proposed use and so must the local planning authority. These are two separate things. For example, a lease may permit general retail use, but if the planning consent only allows for office space, you could face enforcement action. Always check both the lease terms and the planning use class, do not rely on verbal assurances or what is stated in the heads of terms.

9. Fitting out? You may need permission

If you plan to make any changes to the layout or appearance of the property such as adding signage, building internal partitions, changing flooring or installing new lighting, you will likely need the landlord’s consent. This is known as a licence for alterations. In addition, some works may also require building regulation approval or planning permission. Many tenants assume they can do what they like once they’ve signed the lease, but that’s not the case. It is prudent to start these conversations early with the landlord or managing agent to avoid challenges or delays.

10. Get legal advice early

By the time you receive the draft lease most of the commercial terms have already been agreed. That means there is limited room for negotiation on things like the length of the lease, rent levels, repair obligations or break clauses. That’s why I always recommend getting legal advice at the heads of terms stage – not just when the documents land. A solicitor who’s involved early can help flag potential issues, negotiate key protections, and guide you through what’s negotiable and what’s not. This can save a great deal of stress and any surprise costs down the line.