How to Review a Lease Agreement (2026 Checklist)

How to review a lease agreement A lease agreement gives you the right to occupy property for a period in return for rent. Whether it is commercial space, a home, or equipment, the landlord or lessor usually drafts it, so reviewing it means working out your real total cost, the obligations you take on, and how and when you can get out. This checklist goes clause by clause from a tenant's or lessee's view. It is general information, not legal advice; local property law matters a great deal, so have a lawyer review anything significant. Match the lease to the deal. Check that the parties, the property described, the rent, the term, and any agreed incentives (a rent-free period, a fit-out contribution) match what you negotiated. A heads-of-terms or offer letter is useful to compare against. ## The review checklist ### 1. Parties, property, and permitted use - The exact property, including any shared or common areas and parking.

• The permitted use: can you use the space for your actual purpose, and can it change?
• Any restrictions on the type of business or activity. ### 2. Term and renewal - The length of the term and the start date.
• Renewal or extension rights, and whether renewal is automatic, by option, or by statute.
• In many places commercial tenants have statutory renewal rights unless they are excluded, and that exclusion is a major point. ### 3. Rent, increases, and other money - The rent and how often it is paid.
• Rent review: how and when rent goes up (fixed steps, index-linked, or open-market review). Is there a cap or collar?
• Service charge: what it covers, how it is apportioned, and whether it is capped.
• Other outgoings: property taxes, insurance, and utilities, and who pays them. Build the full annual cost, not just the headline rent. ### 4. Deposit and guarantees - The deposit amount, how it is held, and the conditions for its return.
• Any rent deposit deed, bank guarantee, or personal guarantee required. ### 5. Repairs, condition, and reinstatement - Who repairs what: the structure, the interior, the services?
• A full repairing obligation can make a tenant responsible for the whole property, even pre-existing wear. A schedule of condition can limit that.
• Reinstatement: must you return the property to its original state at the end, and remove your fit-out? Repair and reinstatement obligations are among the biggest hidden costs in commercial leases. ### 6. Alterations, assignment, and subletting - Can you make alterations, and do you need consent?
• Can you assign the lease or sublet, on what conditions, and must the landlord be reasonable about consent?
• Can you share occupation with group companies? ### 7. Break rights and termination - Is there a break clause letting you end the lease early, and what conditions attach (notice, rent paid, vacant possession)?
• Break conditions are often drafted so tightly that a small breach defeats the break, so read them carefully.
• The landlord's forfeiture or termination rights and any cure period. ### 8. Insurance and damage - Who insures the building, and do you pay the premium through the rent or service charge?
• What happens if the property is damaged or destroyed: does rent suspend, and can either party end the lease? ### 9. Default and remedies - What counts as default, what notice you get, and what the landlord can do (forfeiture, drawing on the deposit, suing for arrears). ### 10. Governing law and disputes - The governing law and how disputes are resolved. ## Red flags to stop on - A full repairing and insuring obligation on an older property with no schedule of condition.
• Rent review that only goes up (upward-only) with no cap.
• A break clause with conditions so strict you are unlikely to meet them.
• Exclusion of statutory renewal rights without you realising it.
• A broad reinstatement obligation that makes exit expensive.
• An uncapped service charge. ## Jurisdiction points to check - Security of tenure. Commercial tenants have statutory renewal rights in some systems (for example the Landlord and Tenant Act 1954 in England and Wales) that can be contracted out of. Residential tenancies are heavily regulated and vary widely.
• Property statutes. In India, leases are governed by the Transfer of Property Act, 1882 and state rent and stamp laws; registration and stamp duty are often mandatory. In the US, equipment leases fall under UCC Article 2A, and real-property leases under state law.
• Deposits. Many jurisdictions regulate how deposits are held and returned, especially for homes. Mark anything uncertain as "to verify with local counsel". ## Reviewing a lease in one place Reading each clause, building the real cost, marking the heavy obligations like full repairing or upward-only review, and tracking what the landlord agreed to change are manual tasks, and the key dates (break, review, renewal) are easy to lose later. They can live in one AI contract workspace. A tool like Adira opens a document and flags positions clause by clause as favourable, neutral, or unfavourable to you, surfaces risky terms and extracts key dates such as a break deadline, lets you ask for changes in plain English, and keeps a timeline of every version. The point is simply that reading, marking, and tracking a lease do not have to be three separate jobs. This article is general information, not legal advice.