Corporate Law Series

Commercial Leases: What Business Owners Should Review Before Signing

June 18, 2026 | Vernon, Armstrong & Lake Country, BC

For most businesses in the North Okanagan, the lease is the single most significant contract they will ever sign. A storefront on Vernon's Main Street, a shop bay in an Armstrong industrial park, or a unit in a Lake Country commercial plaza represents years of rent obligations — often adding up to far more than any equipment purchase or supplier agreement. Yet commercial leases are routinely signed quickly, under pressure to secure a space, with little review of the dense clauses inside.

Abbey Law Corporation has reviewed and negotiated commercial leases for North Okanagan businesses for more than a decade. Here is what every business owner should understand before putting pen to paper.

Commercial Leases Are Not Like Residential Leases

The first thing to know: the protections that apply to residential tenancies in BC generally do not apply to commercial leases. There is no equivalent regime of standardized protections, rent controls, or prescribed forms. In the commercial world, the lease document itself is close to the whole story — courts will largely hold sophisticated parties to what they signed.

That cuts both ways. It means a poorly negotiated lease can bind your business to genuinely harsh terms. It also means nearly everything is negotiable, especially before you sign. The review stage is your window of maximum leverage.

Understand What You Are Really Paying

The advertised rent is rarely the full cost. Commercial leases commonly use structures that add significant amounts on top of base rent:

Base rent. The headline figure, usually expressed per square foot per year.
Additional rent (operating costs). In a typical "triple net" lease, the tenant also pays a proportionate share of property taxes, insurance, maintenance, and common area costs. These amounts can be substantial and can rise year over year.
Utilities and services. Confirm what is separately metered and what is shared.
Measurement matters. Verify how the leased area is measured, since rent and cost-sharing are often calculated on it.

Before signing, ask for a history or estimate of operating costs and have the definitions reviewed. The difference between a well-defined and an open-ended operating cost clause can amount to thousands of dollars a year.

Key Clauses That Deserve Close Attention

Beyond rent, several clauses shape how safe — or exposed — your business will be over the term:

Term and renewal options. How long are you committed, and do you have enforceable options to renew? A renewal right protects the goodwill you build at a location.
Permitted use. The lease will define what business you may operate. A narrow use clause can prevent your business from evolving.
Exclusivity. In multi-tenant properties, consider whether you need protection against the landlord leasing nearby space to a direct competitor.
Assignment and subletting. If you sell your business or need to downsize, can you transfer the lease? On what conditions?
Repair and maintenance obligations. Understand precisely what you are responsible for, including whether you could be liable for major systems such as the roof or HVAC.
Fixturing and improvements. Who pays for the build-out, who owns the improvements, and what must be removed or restored at the end of the term?
Default and remedies. Know what happens if rent is late and what cure periods you are given before the landlord can act.
Demolition and relocation clauses. Some leases let a landlord relocate the tenant or terminate for redevelopment — significant risks worth identifying before you invest in a space.

Personal Guarantees: Read Before You Sign

Landlords frequently ask the individuals behind a corporate tenant to personally guarantee the lease. This means that if the business fails, the landlord can pursue you personally for unpaid rent — potentially for the remainder of the term. Guarantees are often negotiable in scope: they may be limited in duration, capped in amount, or released once the tenant establishes a payment history. At minimum, every business owner should understand exactly what personal exposure a guarantee creates before agreeing to it.

The Offer to Lease: Small Document, Big Consequences

Many commercial tenancies begin with an offer to lease or letter of intent. Business owners sometimes treat these as informal preliminary steps — but depending on how they are drafted, they can create binding obligations before the formal lease is ever prepared. The moment a landlord presents an offer to lease, the negotiation has begun. Having it reviewed at that stage, rather than after signing, keeps your options open and your leverage intact.

Frequently Asked Questions

Can I negotiate a commercial lease, or is it take-it-or-leave-it?

Almost everything is negotiable, particularly rent-free fixturing periods, renewal options, guarantee limits, and operating cost definitions. Landlords expect informed tenants to negotiate.

What is the difference between a gross lease and a net lease?

In a gross lease, most property costs are bundled into a single rent figure. In a net lease, the tenant pays base rent plus a share of the property's operating costs. Net leases are common in commercial settings, which is why the operating cost clause deserves close review.

I am buying an existing business. What happens to its lease?

The lease usually requires landlord consent to assign it to a buyer. Reviewing the lease — its remaining term, renewal rights, and assignment conditions — is a core part of due diligence when purchasing a business.

What if I need to leave before the term ends?

Your options depend on the assignment, subletting, and default provisions in the lease. Negotiating flexibility at the start is far easier than seeking it midway through a term.

Does Abbey Law act for landlords too?

Yes. We draft and review commercial lease agreements for both landlords and tenants across the North Okanagan, and that dual perspective informs our advice on both sides.

Clarity Before the Commitment

A commercial lease should be a foundation for your business, not a source of surprises. Our approach at Abbey Law Corporation is to translate the dense language of a lease into a clear picture: what you will pay, what you are responsible for, where the risks sit, and which terms are worth pushing back on. We serve businesses throughout Vernon, Armstrong, and Lake Country, and we know the local commercial landscape those businesses operate in.

Before you sign an offer to lease or a full lease document, take the time to understand it. A focused legal review now can protect your business for the entire term.

Need a Commercial Lease Reviewed?

Contact Abbey Law Corporation to book a consultation.