# Example: Contract Review — Commercial Office Lease This example shows a complete multi-pass review of a commercial office lease with flagged risks and missing protections. --- ## The Conversation **User:** Review this lease my landlord sent over: > **COMMERCIAL LEASE AGREEMENT** > > This Lease Agreement ("Lease") is entered into as of April 1, 2026, by and between Granite Peak Properties LLC ("Landlord"), a Colorado limited liability company, and Tenant identified below. > > **Tenant:** _______________ > **Premises:** Suite 310, 1400 Blake Street, Denver, CO 80202 (approximately 1,200 sq ft) > **Term:** 36 months commencing May 1, 2026 through April 30, 2029 > **Base Rent:** $3,600/month ($36/sq ft annually), due on the 1st of each month > **Security Deposit:** $10,800 (three months' rent) > > **1. RENT ESCALATION.** Base Rent shall increase by 5% on each anniversary of the Commencement Date. > > **2. TRIPLE NET (NNN).** Tenant shall be responsible for Tenant's Pro Rata Share of all Operating Expenses, including but not limited to real property taxes, insurance premiums, common area maintenance ("CAM") charges, utilities, and building management fees. Landlord shall provide Tenant with an annual estimate of Operating Expenses. Tenant shall pay 1/12 of the estimated annual amount monthly. Landlord shall provide a year-end reconciliation. > > **3. PERMITTED USE.** The Premises shall be used solely for general office purposes. Any change in use requires Landlord's prior written consent, which may be withheld in Landlord's sole discretion. > > **4. MAINTENANCE AND REPAIRS.** Tenant shall maintain the Premises in good condition and shall be responsible for all repairs within the Premises, including but not limited to HVAC systems, plumbing, electrical systems, and interior finishes. Landlord shall maintain the structural elements of the building and the roof. > > **5. ALTERATIONS.** Tenant shall make no alterations, additions, or improvements to the Premises without Landlord's prior written consent. All approved alterations shall become the property of Landlord upon installation. > > **6. PERSONAL GUARANTEE.** As a material inducement for Landlord to enter into this Lease, the individual signing on behalf of Tenant hereby personally and unconditionally guarantees all obligations of Tenant under this Lease, including but not limited to the payment of all Rent and the performance of all covenants. This guarantee shall survive the expiration or termination of this Lease. > > **7. RELOCATION.** Landlord reserves the right to relocate Tenant to comparable space within the building upon 30 days' written notice. Landlord shall bear the reasonable costs of such relocation. > > **8. DEFAULT AND REMEDIES.** If Tenant fails to pay Rent within 5 days of the due date, or fails to cure any other default within 10 days of written notice, Landlord may (a) terminate this Lease, (b) accelerate all remaining Rent for the balance of the Term, and (c) pursue any other remedies available at law. Tenant shall pay all costs of collection, including reasonable attorneys' fees. > > **9. ASSIGNMENT AND SUBLETTING.** Tenant shall not assign this Lease or sublet any portion of the Premises without Landlord's prior written consent, which may be withheld in Landlord's sole and absolute discretion. > > **10. INSURANCE.** Tenant shall maintain commercial general liability insurance with minimum limits of $1,000,000 per occurrence and $2,000,000 aggregate, naming Landlord as additional insured. > > **11. INDEMNIFICATION.** Tenant shall indemnify, defend, and hold harmless Landlord from any and all claims, losses, damages, and expenses arising from Tenant's use of the Premises or any act or omission of Tenant, its employees, agents, or invitees. > > **12. GOVERNING LAW.** This Lease shall be governed by the laws of the State of Colorado. > > **13. ENTIRE AGREEMENT.** This Lease constitutes the entire agreement between the parties. No oral representations or modifications shall be binding unless set forth in writing and signed by both parties. --- **Agent:** ## 📋 CONTRACT REVIEW SUMMARY ━━━━━━━━━━━━━━━━━━━━━━━━━━━━ **Document:** Commercial Office Lease **Parties:** Granite Peak Properties LLC (Landlord) ↔ Your business (Tenant) **Premises:** Suite 310, 1400 Blake St, Denver, CO 80202 (~1,200 sq ft) **Term:** 36 months (May 1, 2026 — April 30, 2029) **Base Rent:** $3,600/month ($43,200/year) **Total Minimum Commitment:** ~$136,000+ over 3 years (before NNN and escalations) **Overall Risk:** 🔴 High **Flags:** 3 🟢 Standard | 4 🟡 Review | 3 🔴 Significant Risk **Top Concerns:** 1. Personal guarantee exposes your personal assets 2. Relocation clause lets landlord move you at will 3. Rent acceleration on default — you'd owe the full remaining lease balance **Missing Protections:** 5 identified **Recommendation:** Request modifications before signing. Consult an attorney for the personal guarantee and rent acceleration clauses. --- ## Clause-by-Clause Analysis ### Section 1 — Rent Escalation **Risk Level:** 🟡 Review Recommended > "Base Rent shall increase by 5% on each anniversary" **What this means:** Your rent goes up 5% every year automatically. Starting at $3,600/month, you'd pay $3,780 in year 2 and $3,969 in year 3. **Why flagged:** 5% annual escalation is above market. Typical commercial lease escalations in Denver run 2-3% annually, and some are tied to CPI (inflation index). Over 3 years, you'll pay approximately $4,300 more than you would at a 3% rate. **Suggested edit:** "Base Rent shall increase by 3% on each anniversary of the Commencement Date" or "Base Rent shall increase annually by the greater of 2% or the percentage increase in the Consumer Price Index (CPI-U) for the Denver-Aurora-Lakewood metropolitan area." --- ### Section 2 — Triple Net (NNN) **Risk Level:** 🟡 Review Recommended > "Tenant shall be responsible for Tenant's Pro Rata Share of all Operating Expenses" **What this means:** On top of your base rent, you pay a share of the building's property taxes, insurance, maintenance, and management fees. This could add $8-15/sq ft annually ($800-1,500/month) depending on the building. **Why flagged:** NNN leases are common for commercial space, but this clause has no cap on Operating Expenses and no exclusions for capital improvements. The landlord could pass through the cost of a new roof or elevator repair as an "Operating Expense." **Suggested edit:** Add: "Operating Expenses shall not include capital improvements, depreciation, mortgage payments, or costs reimbursed by insurance. Tenant's Pro Rata Share of Operating Expenses shall not increase by more than 5% annually over the prior year's actual expenses." --- ### Section 3 — Permitted Use **Risk Level:** 🟢 Standard Restricting use to general office purposes is standard. The consent requirement for changes is normal. No issues here. --- ### Section 4 — Maintenance and Repairs **Risk Level:** 🟡 Review Recommended > "Tenant shall be responsible for all repairs within the Premises, including but not limited to HVAC systems, plumbing, electrical systems" **What this means:** You're on the hook for fixing everything inside your suite — including the HVAC, plumbing, and electrical. If the AC breaks, that's your bill, not the landlord's. **Why flagged:** Making the tenant responsible for HVAC is aggressive. HVAC systems are building infrastructure and can cost $5,000-15,000 to repair or replace. In many commercial leases, HVAC is the landlord's responsibility or shared. Plumbing and electrical systems serving the Premises (not just fixtures) should also be landlord territory. **Suggested edit:** "Tenant shall maintain the interior finishes of the Premises and shall be responsible for minor repairs under $500 per occurrence. Landlord shall be responsible for HVAC systems, plumbing, and electrical systems serving the Premises." --- ### Section 5 — Alterations **Risk Level:** 🟡 Review Recommended > "All approved alterations shall become the property of Landlord upon installation" **What this means:** Anything you build out or install becomes the landlord's property. If you spend $20,000 on a custom buildout, you leave it behind when you go. **Why flagged:** The ownership transfer is standard, but there's no tenant improvement allowance mentioned and no provision for removing your trade fixtures (equipment, furniture, signage). You should be able to take your stuff when you leave. **Suggested edit:** Add: "Notwithstanding the foregoing, Tenant's trade fixtures, equipment, and removable personal property shall remain the property of Tenant, and Tenant shall have the right to remove the same upon expiration or termination, provided Tenant repairs any damage caused by such removal." --- ### Section 6 — Personal Guarantee **Risk Level:** 🔴 Significant Risk > "The individual signing on behalf of Tenant hereby personally and unconditionally guarantees all obligations" **What this means:** If your business can't pay rent, the landlord can come after your personal bank accounts, home, car, and other personal assets. This pierces the protection of your LLC or corporation. The guarantee survives even after the lease ends. **Why flagged:** This is the most dangerous clause in this lease. Personal guarantees are sometimes required for new businesses without credit history, but "unconditional" with no cap and no time limit is extremely aggressive. You formed a business entity specifically to separate business and personal liability — this clause eliminates that protection. **Suggested edits (negotiate in order of preference):** 1. **Remove entirely:** "Section 6 is deleted in its entirety." (Best outcome) 2. **Cap it:** "Personal Guarantee shall be limited to [6 months' rent] and shall expire after the first 12 months of the Lease Term, provided Tenant is not in default." 3. **Burn-off provision:** "Personal Guarantee shall automatically terminate after 18 months of timely rent payments." --- ### Section 7 — Relocation **Risk Level:** 🔴 Significant Risk > "Landlord reserves the right to relocate Tenant to comparable space within the building upon 30 days' written notice" **What this means:** The landlord can force you to move to a different suite in the building with just 30 days' notice. They pay moving costs, but you have no say in the matter. **Why flagged:** This gives the landlord unilateral power to disrupt your business. "Comparable space" is subjective — comparable in square footage doesn't mean comparable in location, visibility, or layout. You could be moved from a street-facing suite to an interior room. Clients who know your current location would be confused. This is uncommon in stronger tenant markets. **Suggested edits:** 1. **Remove entirely** (best option) 2. **Add protections:** "Comparable space shall mean space of equal or greater square footage, similar configuration, and comparable visibility. Tenant shall have the right to approve or reject any proposed relocation. If Tenant rejects the proposed space, this clause is void." --- ### Section 8 — Default and Remedies **Risk Level:** 🔴 Significant Risk > "Landlord may accelerate all remaining Rent for the balance of the Term" **What this means:** If you're late on rent by 6 days and don't fix it within 10 days, the landlord can demand the entire remaining lease balance immediately. If you're 18 months into a 36-month lease, that's 18 months of rent (~$65,000+) due all at once. **Why flagged:** The 5-day grace period is extremely short (10-15 days is more typical). Rent acceleration is a nuclear option that shouldn't be the first remedy. Combined with the personal guarantee, this means a single missed payment could trigger a $65,000+ personal liability. **Suggested edits:** - Extend grace period: "If Tenant fails to pay Rent within **15 days** of the due date..." - Remove acceleration: Replace with "Landlord may charge a late fee of 5% of the overdue amount" as the first remedy, with termination only after repeated defaults - Add cure period: "Landlord shall provide written notice of default. Tenant shall have **30 days** to cure any non-monetary default and **15 days** to cure any monetary default." --- ### Section 9 — Assignment and Subletting **Risk Level:** 🟢 Standard "Sole and absolute discretion" is somewhat aggressive, but restricting assignment/subletting is standard in commercial leases. If you want flexibility to sublease, negotiate for a "consent not unreasonably withheld" standard. --- ### Section 10 — Insurance **Risk Level:** 🟢 Standard $1M/$2M limits with additional insured status for the landlord is completely standard for commercial office leases. No concerns. --- ### Section 11 — Indemnification **Risk Level:** 🟢 Standard One-way indemnification favoring the landlord is typical in leases. This is within normal range. --- ## Missing Protections ### 1. CAM Cap / Operating Expense Cap **What's missing:** No limit on how much Operating Expenses can increase year-over-year. **Why it matters:** Without a cap, your NNN costs could spike 20%+ in a single year if the building needs major repairs. **Add:** Annual cap of 5% increase on controllable Operating Expenses. ### 2. Right to Sublease **What's missing:** No reasonable consent standard for subletting. **Why it matters:** If your business shrinks or changes, you're stuck paying for space you don't need with no way to offset costs. **Add:** "Landlord's consent to subletting shall not be unreasonably withheld, conditioned, or delayed." ### 3. Tenant Improvement Allowance **What's missing:** No buildout allowance from the landlord. **Why it matters:** Most commercial leases include a TI allowance ($20-50/sq ft) for the tenant to customize the space. On 1,200 sq ft, that's $24,000-60,000 you're leaving on the table. **Add:** "Landlord shall provide a Tenant Improvement Allowance of $___/sq ft." ### 4. Early Termination Option **What's missing:** No way to exit the lease early. **Why it matters:** A 3-year commitment with no exit is risky for a growing or changing business. Most tenants negotiate a break clause. **Add:** "Tenant may terminate this Lease after 18 months with 90 days' written notice and payment of a termination fee equal to 3 months' rent." ### 5. Force Majeure **What's missing:** No provision excusing performance during extraordinary events. **Why it matters:** A pandemic, natural disaster, or government order could prevent you from using the space. Without force majeure, you still owe full rent. **Add:** Standard force majeure clause excusing or abating performance during events beyond either party's reasonable control. --- ## Bottom Line This lease is heavily landlord-favorable. The three biggest issues — personal guarantee, relocation clause, and rent acceleration — should be addressed before signing. The missing protections (especially CAM cap and TI allowance) represent significant money being left on the table. **Consult an attorney for complex or high-value agreements.** A 3-year commercial lease with $136,000+ in total obligation warrants professional review. An attorney experienced in Denver commercial real estate can likely negotiate these points and may save you tens of thousands of dollars. --- *Review generated by Legal Docs Pro. This analysis is for informational purposes only and does not constitute legal advice.*