Small Business Shared Interest Group

Leases are often one of the largest long-term commitments on the balance sheet, and subtle contract terms can create big financial and operational exposure. Before you sign, review:
🔹 Economic terms and escalation clauses
🔹 Renewal/termination mechanics
🔹 CAM and pass-through expenses
🔹 Maintenance vs. capital responsibilities
🔹 Tenant improvement allowances
🔹 Use, compliance, and liability provisions

Bring in legal counsel when:
⚠️ The lease is complex or highly customized
⚠️ TI allowances or incentives come with strings
⚠️ Indemnity, environmental, or compliance risk appears
⚠️ Restrictions may impact future mergers, subleases, or operations
⚠️ Language is ambiguous or impacts ASC 842/IFRS 16 treatment

Attached is a more in-depth lease review checklist designed to proactively help you catch any issues before signing.

What is the most important thing you look for when reviewing a new lease agreement? 

Do you evaluate your leases for accounting implications before signing?

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Amanda Bernard CMA,CPA,CFE
Director/Manager
Douglassville PA
United States
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Fantastic resource Amanda! @Amanda Bernard

Useful across a number of sectors, almost just all of them!

➡️ We look for how this lease falls in line with traditional leases — terms, covenants, caveats, fine print . . . Start with the basics, how does our lease differ from other comparable industry leases.

Of course, lessee and lessor obligations — as the lessor, we want to minimize our #risk, #cost, and increase flexibility.

From there we drill down to the nuance.

You are awesome for posting!!!

Your Buddy,

ilya

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Ilya Ilienko, dual MBA, CPA, CMA
Board Member / Director
East Coast - United States
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