Before You Sign: An Office Lease Checklist

By the time a lease is ready to sign, it has usually been through several drafts between the attorneys. Terms move during that process. Some changes are negotiated. Others are drafting errors, or language from the landlord’s standard form that quietly overrides a point agreed earlier.

This checklist is a final pass, not a substitute for legal review. Your attorney reads the lease for legal risk. Your broker checks it against the business deal. You, as the person signing, should understand what you are committing the company to. Work through the sections below with both advisors, using the final draft and the signed letter of intent side by side.

Review the actual signature version, not the draft before it. Ask for a comparison document showing every change since the last version you read.

Start with the letter of intent and confirm each business term appears in the lease as agreed.

• ✓Is the tenant the correct legal entity, with its exact registered name?
• ✓Are the suite number, floor and square footage correct, and does the floor plan exhibit show the right space?
• ✓Is the rentable area stated, and is it the figure the rent was calculated on?
• ✓Is the term the agreed length, with the commencement and expiration dates or the formula for setting them?
• ✓Is the permitted use broad enough for everything we do, including any lab, hardware or equipment room use?
• ✓Are parking, signage and access to building amenities included as agreed?
• ✓Has anything agreed in the letter of intent been left out?
• ✓Has anything been added that was never discussed?

Check every figure against the proposal comparison your broker prepared. Then build the cash schedule for the first year from the lease itself and see whether it matches your budget.

• ✓Is the rent schedule correct for every year, including each increase?
• ✓Is the free rent period stated with exact dates, and does it cover the charges we agreed it would?
• ✓Can the landlord reclaim the free rent or other concessions if we default later, and on what terms?
• ✓Are operating expenses and real estate taxes handled as agreed: base year or net, our share, any cap, and any exclusions?
• ✓Do we have the right to review the landlord’s expense records?
• ✓How is electricity charged, and what is the rate for heating and cooling outside building hours?
• ✓Is the improvement allowance amount correct, and are the eligible costs, the payment process and the deadline to use it clear?
• ✓Is the security deposit or letter of credit the agreed amount, with any reduction schedule and the conditions for reduction written in?
• ✓Are late fees, interest and any administrative charges reasonable and understood?
• ✓Who pays the brokerage commission, and is that stated?

Dates cause more disputes than rates. A lease should say what happens when a date is missed, by either side.

• ✓When must the landlord deliver the space, and in what condition?
• ✓If delivery is late, does our rent start date move with it? Do we receive any remedy, or a right to cancel after a prolonged delay?
• ✓Does rent start on a fixed date or when the work is substantially complete, and who decides when that is?
• ✓What counts as a delay caused by us, and what are the consequences?
• ✓Do we have early access for cabling, furniture and equipment before rent starts?
• ✓Do we know the notice window for every option, and is each one on our calendar?
• ✓What happens if we stay after expiration, and what would we owe?

Exhibits are part of the lease and often contain its most practical terms. They are also the pages most likely to be missing, outdated or inconsistent with the main document on signing day.

• ✓Is every exhibit listed in the lease actually attached and complete?
• ✓Does the work letter describe the landlord’s work, our work, the plans, the schedule and who pays for changes?
• ✓Do the plans or specifications attached reflect the latest version, including the equipment room, cooling and power we need?
• ✓Have we read the building rules and regulations, and do any conflict with how we operate, such as hours, deliveries or equipment?
• ✓If there is a guarantee, is it in the agreed form, with the agreed limits and any expiration?
• ✓Is the form of letter of credit attached, and has our bank confirmed it can issue one in that form?
• ✓Is there a commencement date memorandum to sign once the dates are fixed?
• ✓Has the landlord provided, or agreed to seek, a non-disturbance agreement from its lender if we negotiated for one?
• ✓Are the building’s insurance requirements stated, and has our insurance broker confirmed we can meet them?

These are the clauses a technology company relies on when plans change. Each was probably summarized in a line of the letter of intent. Confirm the full clause delivers what that line promised.

• ✓Are renewal, expansion and termination rights written out with their conditions, notice periods and pricing?
• ✓Are any of those rights lost if we sublease, assign or are acquired?
• ✓What is the landlord’s consent standard for a sublease or assignment, and can the landlord recapture the space or share in the proceeds?
• ✓Can we transfer the lease in a merger, sale or financing without consent, as agreed?
• ✓Do we have the right to install and operate supplemental cooling, backup power, rooftop or riser equipment and our own security systems, as agreed?
• ✓Can we choose our own connectivity providers and bring them into the building?
• ✓Do we have access at all hours, every day?
• ✓What must we remove at the end of the term, and has the landlord waived removal of the initial improvements if that was agreed?
• ✓What are the landlord’s rights to enter our space, and are there limits for secure areas?
• ✓What are our remedies if the landlord fails to perform or if building services are interrupted?

1. Get written confirmation from your attorney that the review is complete and that open comments are resolved.
2. Confirm internal approvals, including any board or investor consent your company’s governing documents require.
3. Confirm that the person signing has authority to bind the company, and that the signature block shows the entity and title correctly.
4. Check that no individual is signing in a personal capacity unless a personal guarantee was knowingly agreed.
5. Arrange the deposit or letter of credit and the first payment due at signing.
6. Provide the certificate of insurance the lease requires before taking possession.
7. Obtain a fully signed copy with every exhibit, and store it where finance, legal and operations can find it.
8. Enter all critical dates into a shared calendar with reminders well ahead of each deadline.

If something on this list is unresolved, pause. A landlord eager to finish will usually fix a legitimate problem quickly, and a problem found after signing is yours. Checking the final lease against the negotiated business terms is part of what TAG does for technology, software and data clients, working alongside their attorneys.