commercial lease key terms; lease clauses; lease provisions; lease reviews;

Commercial Lease Key Terms: Know the rules before you sign!

Alberta Commercial Lease Clauses Continued

This is the second part of the key commercial lease terms that should be reviewed by a lawyer in Alberta. If you have not seen the first part of the series, you can access the Commercial Lease Clauses to Review In Alberta Part I here. The clauses in both pages are not in any particular order. Any of these commercial lease terms can have significant financial or business consequences to your business. If you have questions the commercial lease lawyers at Calgary based Kahane Law Office are happy to assist in your lease review or, where needed, commercial lease drafting.

Parking Clauses in Your Lease

Does the lease set out parking rights? Is this adequate for your business? You need to ensure that you have enough parking for your employees and/or your customers. You need to be aware of any extra costs and if you will be entitled to any reserved spots. Lastly, it is essential to know where you parking spots are. These should be specified specifically in the lease if possible.

Insurance Clauses

Leases may have one or several lease provisions with respect to insurance requirements. Commercial lease key terms that relate to insurance may be together or throughout your lease agreement. It is important to understand these to not only determine if you are in breach of the lease but to determine the cots of securing adequate insurance. Lastly, there may be insurance requirements that are not possible to meet. You must look at if the insurance requirement is reasonable and fair given the premise.

Repairs to the Premises

There provisions maybe very onerous on the tenants. Who is responsible for repair costs? Is this reasonable? Is the Landlord responsible for repair and damage obligations for their own negligence or omissions? Also, is the Landlord liable for willful acts of misconduct or negligence? There may be a separate section related to glass on the premises (windows), signage, vandalism, etc. These are commercial lease key terms that can be costly to tenants and are often separated into separate terms throughout the lease.

Default Provisions

If a tenant defaults on the lease, there are often commercial lease key terms that have drastic consequences. The effect of default can range from immediate termination of the lease to penalty provisions. It is extremely important to understand the commercial lease key terms. Exactly what action or lack of action will be deemed to be a default under the lease. Deemed defaults are often not obvious. The triggering event that causes the default may also not be intuitive as they are deemed to be defaults under the lease and are agreed to as between the landlord and the tenant.

Clauses Dealing With Competition

Some leases will have a term that limits competition for specific tenants. Ie: only one fast food business or convenience store. The way the language in these terms are worded is significant too. You not only want to make sure that your business is protected but also that there will not be a claim by another business that will seek to prevent you from operating. You also have to be aware of the terms as they relate to other tenants in case your business intends on expanding the products or services that are offered from that location.

Rights Of First Refusal

Many leases have terms that allow the landlord to sell the land and/or business. The sale of leased space may have significant consequences on a tenants. Commercial lease key terms include those that give a tenant the right of first refusal should the landlord want to sell. This is often a term in smaller buildings where there are a limited number of tenants. The opportunity to buy your leased premises may be a excellent long term investment in long terms financial and business stability.


This can be one of the most important commercial lease key terms. Without a renewal provision, you may be forced to relocate your business. This is often an unexpected expense but it is also disruptive to your business and problematic for customers. There is also the issue of the cost of leasehold improvements. Not only have you likely spent money on renovating the space you are in, but you will then have to expend more money on a new location. Lease renewals should be reviewed by a lawyer for the specific term but also the cots of renewals and the mechanism of determining what a fair and reasonable rent it under a lease renewal.

There are many other clauses that you will want to have reviewed, and be certain with before signing the lease and agreeing to its terms. Once the agreement is signed, you are bound by its terms.

Personal Guarantees That Tie You Personally To The Commercial Lease Terms

Most commercial leases come with the requirement that the principal of the company sign a personal guarantee (click to learn about them here). A personal guarantee is an agreement that legally ties any debt that the company has to you. This means that you lose the protection that you would normally have by the corporation. This is one of the key benefits of incorporating your business. Having a lawyer review the commercial lease key terms or clauses means that you will know exactly what you are legally responsible for.

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Commercial Lease Key Terms Lawyers

The corporate commercial and real estate lawyers at Kahane Law Office in Calgary, Alberta can help you to review your commercial lease to ensure that your business is adequately protected. We can be reached toll-free at 1-877-225-8817 (or 403-225-8810 locally in Calgary, Alberta), or email us directly here.