Sample Analysis Report

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Executive Summary

Lease Type: Retail

This lease imposes significant financial risk on the tenant. Unlike a Gross lease, this is a Triple Net (NNN) agreement where you are responsible for property taxes, insurance, and CAM charges WITHOUT a cap. Notably, the 'Relocation' clause allows the landlord to move your store at any time, and the 'Personal Guaranty' is unlimited.

Danger Score

Detected Red Flags

CriticalIssue Score: 95/100

Dangerous Relocation Clause

Section 14.02 - Substitution of Premises

Why it's dangerous

The landlord can force you to move your business to a different location (e.g., a back corner with no foot traffic) with only 30 days' notice. They do NOT promise to pay for your renovation or moving costs.

“Landlord shall have the right... to substitute for the Premises other premises of substantially equal size... upon 30 days notice.”

Negotiation Tactic

Argue that your business relies on this specific location/foot traffic and moving would destroy your revenue.

Suggested Redline

Landlord shall have no right to relocate Tenant during the Initial Term.

HighIssue Score: 80/100

Uncapped Operating Expenses (CAM)

Section 4.05 - Operating Expenses

Why it's dangerous

There is no 'Cap' on how much these fees can increase. If the landlord replaces the roof ($100k) or hires a more expensive property manager, your rent could skyrocket.

“Tenant's Share of Operating Expenses shall include... capital improvements, roof replacements, and management fees.”

Negotiation Tactic

State that as a small business, you need predictable monthly expenses to survive.

Suggested Redline

Tenant's Share of Controllable Operating Expenses shall not increase by more than 4% over the previous year.

CriticalIssue Score: 90/100

Unlimited Personal Guaranty

Exhibit G - Guaranty of Lease

Why it's dangerous

You are personally liable for the rent if the business fails. The landlord can sue you for your personal assets (house, savings) for the entire lease term.

“Guarantor hereby unconditionally guarantees the full performance of all Tenant's obligations... indefinitely.”

Negotiation Tactic

Offer a higher security deposit in exchange for burning off the guaranty after Year 2.

Suggested Redline

Guaranty shall expire upon the second anniversary of the Commencement Date, provided Tenant is not in default.

Negotiation Email Draft

Dear Landlord/Broker, I have reviewed the lease proposal and while I am excited about the location, there are a few critical "deal-breaker" items regarding risk allocation that we need to address before we can proceed. 1. Relocation (Section 14.02): We invest significantly in our build-out and location marketing. We cannot agree to a relocation clause that allows us to be moved. We request this section be deleted. 2. Operating Expenses (Section 4.05): We require a 4% annual cap on controllable operating expenses (excluding taxes/insurance) to ensure our rent remains predictable. 3. Personal Guaranty: We request a "Rolling Guaranty" that burns off after 24 months of on-time payments, rather than an unlimited term. Please let me know if these terms are acceptable so we can move to lease execution. Best regards, [Tenant Name]