What Is Due Diligence for Commercial Lease Agreements?

What Is Due Diligence for Commercial Lease Agreements?

Are you planning on running a business or opening an office in Hendersonville, North Carolina? In 2022, the state was rated as the top destination for business, and it remains open to entrepreneurs.

Don't be surprised if there are many business owners knocking on your door, looking to rent your commercial property. However, you have to do your due diligence for commercial lease agreements first.

But what are the important lease terms to consider before signing an agreement?

Here's what to add to your due diligence checklist:

Offer to Lease

Before being presented with a lease agreement, you'll likely have to sign an Offer to Lease Agreement first. The Offer to Lease Agreement will express the following:

  • Identify each party
  • Description of the premises
  • Stating the terms of the lease
  • Stating the cost of rent and other expenses

In some cases, the Offer to Lease can serve as the final lease agreement. In other cases, it's a legally binding document that precedes the lease agreement. It's always best to review the Offer of Lease Agreement with a real estate lawyer first.


If you're renting out your property, you need to negotiate in your favor. As a landlord, you have to first consider how much to charge.

The rental fee should cover all expenses. It should also give you a decent profit to make your efforts worthwhile. Don't settle for any profit margin when finding a tenant.

Depending on your agreement, you might have to be more hands-on with your commercial property. For example, you may have to oversee any maintenance or repair issues.

This might take a few hours out of your schedule each month. You'll have to calculate this lost time in your profit. If you earn a profit of $100 per month, is it worth the lost time? What about earning a profit of $300 per month?

Consider this when negotiating your price and keeping records of your accounts.

Compliance With Commercial Lease Agreements

The final step with due diligence is to ensure that your tenants are compliant. You'll always have to keep an eye on how they're treating your property. Once again, a real estate lawyer can advise you on any potential legal action.

Some basic due diligence is to make sure your tenants pay rent promptly. You should also conduct at least one property inspection during their stay.

This inspection will alert you of any potential issues with the property. You can also assess if your tenant is being responsible for the upkeep of the property.

Rent Out Your Commercial Property

Now you know the guidelines for due diligence with commercial lease agreements.

Start by preparing the Offer to Lease Agreement. You'll want to hire professional legal services to draft this agreement.

The next step is to negotiate in your favor. You have to do your due diligence to make sure that your profit is worth your effort. After signing a lease, always check that your tenants are remaining compliant.

If you want your commercial property to stand out, you'll need help. PMI Blue Ridge has over 20 years of experience and is looking forward to helping you.