Should I Sign This Lease?

5 Questions to Ask Before Signing Any Lease

These aren't trick questions. They're the ones that separate a good lease from a financial trap.

1. What happens if I need to leave early?

   Life is unpredictable. Job transfers, family emergencies, business downturns — there are dozens of legitimate reasons you might need to break a lease before the term ends. Before you sign anything, you need to know exactly what that will cost you.

   Look for the early termination clause. Some leases require you to pay the remaining months in full. Others allow early termination with a penalty — typically two to three months' rent. Some leases are completely silent on the topic, which can actually be worse because it leaves the landlord free to pursue maximum damages.

   Also check for subletting restrictions. If you can't sublease, you're stuck paying rent on a space you can't use. Many landlords prohibit subletting entirely or require their approval — which they can unreasonably withhold. The best leases allow subletting with reasonable landlord consent and a clear process for requesting it.

2. What fees aren't included in the rent?

   The rent number on page one of your lease is almost never the full picture. Buried in the fine print are charges that can add 20% to 40% on top of your base rent — and most tenants don't discover them until the first invoice arrives.

   Common Area Maintenance (CAM) charges are the biggest offender in commercial leases. These cover everything from hallway cleaning to parking lot repairs to the building's property taxes. They're often estimated at signing, then "reconciled" annually — which almost always means they go up. Ask for a cap on CAM increases.

   Also watch for mandatory insurance requirements that exceed what you'd normally carry, utility markups where the landlord sub-meters and adds a fee, and after-hours HVAC charges that can cost $50-$150 per hour if you work late. Read our full guide on 7 hidden costs buried in your lease for the complete breakdown.

3. Can the landlord raise the rent during my lease?

   You'd think a lease locks in your rent for the entire term. Often, it doesn't. Many leases include escalation clauses that allow annual increases — sometimes tied to the Consumer Price Index (CPI), sometimes a fixed percentage, and sometimes at the landlord's discretion.

   A 3% annual escalation on a $2,000/month lease means you'll be paying $2,251 by year four. That's $3,012 more per year than you budgeted for. Over a five-year lease, those escalations can add up to tens of thousands of dollars.

   Commercial tenants should also watch for percentage rent clauses, where the landlord takes a cut of your gross revenue above a certain threshold. This means the more successful your business becomes, the more rent you pay. Always negotiate a clear cap on any escalation mechanism, and understand exactly when and how increases take effect.

4. What am I personally liable for?

   This is the question that keeps attorneys up at night — and the one most tenants never think to ask. In residential leases, your liability is generally limited to the lease term and security deposit. But in commercial leases, it's a different story entirely.

   A personal guaranty means you're on the hook for the full lease obligation with your personal assets — your house, your savings, your car. If your business fails and you can't pay rent for the remaining three years of a five-year lease, the landlord can come after everything you own.

   Also look for holdover penalties — what happens if you stay even one day past your lease end date. Some leases jack the rent up to 150% or 200% of the monthly rate during holdover periods. And check whether damages beyond your security deposit can be pursued. The best protection is understanding your exposure before you sign. Understanding lease red flags can help you spot the most dangerous clauses.

5. How are disputes handled?

   Nobody signs a lease expecting a fight with their landlord. But disputes happen — maintenance that doesn't get done, charges you didn't expect, disagreements about your obligations. When they do, the dispute resolution clause in your lease determines whether you have a fair shot at resolving them.

   Watch for mandatory arbitration clauses — especially ones where the landlord gets to choose the arbitrator. Arbitration sounds neutral, but it can be stacked against you. Some clauses require arbitration in a different city or state, making it impractical for you to even participate.

   Also look for waiver of jury trial provisions, venue selection clauses that force you to litigate in the landlord's preferred jurisdiction, and attorney fee shifting where you pay the landlord's legal fees regardless of who wins. A fair lease should have balanced dispute resolution — or at minimum, not strip away your right to have your day in court.

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