Before Signing a Commercial Lease: 7 Checks for Alberta Tenants

A commercial lease should be reviewed as more than a monthly rent document. It allocates financial, operational, maintenance, insurance, liability, and exit responsibilities between the tenant and landlord. A useful commercial lease review checklist helps you identify questions before those obligations become difficult or expensive to change.

The following checklist is designed for Edmonton-area businesses, start-ups, and other Alberta tenants reviewing a new lease or renewal. It can help you flag unclear provisions, but the actual lease, schedules, amendments, and related documents still need to be considered together.

Contents

1. Total occupancy cost
2. Premises and operating rights
3. Repairs and alterations
4. Insurance and liability
5. Assignment and change of control
6. Renewal and exit rights
7. Default and disputes

1. Check the Total Occupancy Cost, Not Just Base Rent

The advertised rent is only one part of the financial commitment. Read the provisions dealing with additional rent, operating expenses, property taxes, insurance charges, utilities, maintenance, deposits, administrative charges, and annual increases. The lease should make clear how each charge is calculated, allocated, estimated, reconciled, and supported.

Do not assume that “additional rent” has the same meaning in every lease. Identify whether the tenant may be responsible for changing costs, shared-area expenses, repairs passed through by the landlord, or charges described in a schedule rather than the main agreement. Compare the wording with any budget or estimate supplied during negotiations.

What to check	Why it matters	What to clarify
Base rent and increases	Changes can affect forecasts and long-term affordability.	When does rent change, and how is the new amount determined?
Additional rent and operating costs	These charges can materially change monthly occupancy cost.	Which categories are included, excluded, estimated, or reconciled?
Utilities, maintenance, and services	Responsibility may depend on the premises or building systems.	Which services are separately metered or charged back?
Deposits and other payments	Upfront amounts affect cash flow and may have return conditions.	What is payable, when, and under what conditions is it returned?

Ask for enough information to model the likely total cost, not just the first year’s base rent. If a cost is undefined, discretionary, or subject to a broad increase mechanism, mark it for clarification or legal review before treating the lease as financially workable.

2. Check the Premises, Permitted Use, and Operating Rights

Confirm exactly what is being leased. The description should address the unit or area, parking, storage, loading access, shared facilities, signage rights, and any plans or measurements incorporated into the agreement. If the business depends on customer access, deliveries, visibility, or extended hours, those requirements should not remain informal promises.

Compare the permitted-use clause with the business you intend to operate. A narrow description may not accommodate a new product line, additional service, online fulfilment, future operational changes, or a related business. Also identify who is responsible for permits, zoning-related requirements, building rules, and compliance with restrictions affecting the proposed use.

Look for exclusivity provisions, relocation rights, construction disruption, access restrictions, and rules affecting operating hours. Ask whether the landlord can change common areas, restrict signage, relocate the business, or approve changes to the use.

3. Check Repairs, Maintenance, Alterations, and Restoration

Repair obligations are often spread across several clauses. Separate responsibility for structural elements, the roof, foundations, heating and cooling systems, plumbing, electrical systems, interior finishes, common areas, snow or exterior work, routine maintenance, and emergency repairs. Definitions and exclusions can be as important as the headline allocation of responsibility.

Review the procedure for reporting damage, approving work, responding to emergencies, and recovering costs. Determine whether the tenant must use specified contractors, comply with building standards, maintain service contracts, or pay for work that benefits the wider property. For equipment, partitions, signs, or specialized improvements, check approval requirements, construction standards, permits, ownership, and removal obligations.

Pay particular attention to end-of-term restoration. Document the premises at the beginning of the term with photographs and a written record, and ask for a clear description of the required condition at surrender.

4. Check Insurance, Indemnity, and Liability Exposure

Locate every insurance requirement and compare it with the coverage your business carries. The lease may address commercial general liability insurance, property coverage, tenant improvements, business interruption, deductibles, certificates, additional insured parties, and notice of cancellation or change.

Insurance does not answer every liability question. Read indemnity provisions, exclusions, waivers, and clauses dealing with damage to the premises, customer injuries, contractors, building systems, and third-party claims. Consider whether the risk allocation matches who controls the relevant area or activity.

Ask an insurance professional to confirm that the required coverage is available and adequate. Ask legal counsel to explain unusually broad indemnity or liability wording. Do not assume building insurance protects the tenant’s equipment, inventory, income, or customer-related exposure.

5. Check Assignment, Subleasing, and Change-of-Control Restrictions

Assignment and subleasing provisions control what happens if the business changes direction, adds a partner, restructures, sells its assets, or needs another occupant. Read the consent process carefully. It may require advance notice, financial information, landlord approval, documentation, or payment of the landlord’s costs.

Check whether consent can be withheld under stated conditions, whether the original tenant remains liable after an assignment, and whether a change in ownership or corporate control is treated as a transfer. Look for permitted transfers to related entities, successors, purchasers, or affiliates.

Ask whether you could sell or reorganize the business without breaching the lease. If future flexibility matters, negotiate and document it before signing rather than relying on a later consent request.

6. Check Renewal, Termination, and End-of-Lease Rights

Identify the renewal notice date, renewal period, rent-setting mechanism, required notice format, and conditions that could prevent the option from being exercised. Put every deadline in a calendar with reminders well before the notice period expires.

Review holdover language, early termination rights, relocation provisions, surrender conditions, and the treatment of deposits and improvements. If the business may need to leave early, determine whether the lease provides a negotiated exit, assignment route, termination payment, or no early exit at all.

Ask what condition the premises must be in at surrender, which fixtures may be removed, how outstanding repairs are handled, and whether the landlord can claim costs after possession is returned.

7. Check Default, Remedies, and Dispute Provisions

Review monetary and non-monetary default provisions. Note required notices, cure periods, late charges, interest, termination rights, access or re-entry language, and remedies available to each party. Check whether a missed payment, insurance lapse, unauthorized alteration, or other breach can trigger consequences disproportionate to the problem.

Also identify dispute-resolution procedures, legal-cost provisions, jurisdiction wording, and any right to recover possession or restrict access. These clauses matter most when the relationship has deteriorated, so do not wait for a formal notice before understanding them.

If a lease disagreement escalates, it may involve landlord-tenant conflicts or real estate contract disputes, including lease violations and unpaid rent claims. Prompt legal assessment may be important when a notice has been received, access is threatened, rent is being withheld, or the business faces an interruption.

What to Gather Before Requesting Lease Review

Organize the complete lease and every schedule, exhibit, amendment, rider, and incorporated building rule. Also gather the offer or term sheet, property information, operating-cost estimates or reconciliations, plans, construction obligations, insurance requirements, and written negotiation history.

Prepare a short list of business priorities, including workable occupancy cost, intended use, construction requirements, preferred term, renewal needs, assignment concerns, and promised landlord work. A focused question list helps separate points needing clarification from provisions warranting detailed legal review.

When a Checklist Is Not Enough

Self-screening is useful, but legal review deserves particular consideration when the lease is long-term, the business is making substantial improvements, total costs are uncertain, or the agreement contains broad repair, indemnity, default, or remedy provisions. Advice is also important when renewal, assignment, early termination, or relocation rights are central to the business plan.

Legal review may also be appropriate after negotiations fail or a disagreement develops. Assess the lease with surrounding facts, notices, payment history, correspondence, and related documents. Do not assume a clause is enforceable, standard, or harmless simply because it appears in a landlord’s form.

Commercial Lease Review FAQ

What should I look for in a commercial lease renewal clause?

Check the exercise deadline, notice method, renewal length, rent-setting process, conditions for exercising the option, and whether the tenant must be fully compliant. Confirm what happens if notice is late.

How can I tell whether a commercial lease repair obligation is too broad?

List the systems and areas covered, then compare responsibility with the tenant’s control over them. Watch for wording that includes replacement, structural components, pre-existing defects, or costs benefiting the whole property.

What does additional rent mean when reviewing a commercial lease?

It generally refers to charges payable in addition to stated base rent, but the exact categories depend on the lease. Identify included expenses, exclusions, estimates, reconciliations, records, and increase rules.

Why do assignment and subleasing restrictions matter?

They can affect a future sale, restructuring, change of control, or decision to share or leave the premises. Review consent requirements, continuing liability, permitted transfers, and landlord conditions.

Can a commercial lease checklist replace legal review?

No. A checklist helps identify issues and organize questions, but it cannot interpret the specific agreement, incorporated documents, negotiation history, or business risks. Consider legal review when the commitment is significant or the wording is unusual or unclear.

Make the Lease Work for the Business You Are Building

A strong commercial lease review starts with the full cost, then tests whether the premises and permitted use support the operation. It should also allocate repairs, alterations, insurance, and liability clearly, protect reasonable flexibility, and explain what happens at renewal, exit, default, or dispute.

Use these seven checks to mark unclear language and create focused questions for the landlord. For Edmonton-area tenants with a proposed commercial lease or existing lease concern, SPT Law Office describes its approach as practical, tailored legal advice focused on helping clients understand their options.