A commercial lease is a business contract first and a rental agreement second. Texas law gives commercial landlords and tenants wide freedom to set their own terms, and the consumer protections that apply to residential leases largely do not apply. Whatever the document says will usually govern, even when a term seems harsh.

Most leases are drafted by the landlord's counsel, and the first draft favors the landlord. That is not improper, but it means the tenant who signs without review accepts risks that were negotiable. For landlords, the risk runs the other way: a lease with loose remedies or vague expense language can leave rent uncollected for months.

Below are the provisions that decide most disputes, and what each side should look for before signing.

Rent, escalations, and operating expenses

Base rent is only part of the cost. Many Texas commercial leases are structured on a triple net basis, meaning the tenant also pays a share of property taxes, insurance, and common area maintenance. Review how that share is calculated, whether it is capped, whether the landlord's management fee is included, and whether the tenant has the right to audit the landlord's expense statements. Annual escalations should state a fixed percentage or a defined index; an open ended "market" adjustment invites argument later.

Use, assignment, and exit rights

The permitted use clause controls what the tenant may do in the space, and a narrow clause can block a change in the business model or a sale of the business. Assignment and subletting clauses decide whether the tenant can transfer the lease if it outgrows the space or needs to leave early. Look for a landlord consent standard that cannot be withheld unreasonably, and for any recapture right that lets the landlord take the space back when consent is requested. Renewal options, early termination rights, and holdover rent should be stated in exact terms.

Default, remedies, and the personal guaranty

Texas gives commercial landlords strong remedies. The Texas Property Code allows a landlord to change the locks on a tenant that is behind on rent, and the landlord holds a statutory lien on the tenant's property in the premises for unpaid rent. The lease will usually expand those rights further. Tenants should review the cure periods, the definition of default, acceleration of future rent, and the landlord's duty to mitigate. Most landlords also require a personal guaranty from the business owner. The scope, cap, and duration of that guaranty are negotiable and are often the most important terms in the entire lease for the owner personally.

Maintenance, repairs and who pays for the roof

Commercial leases divide the building into parts and assign responsibility for each. The tenant is typically responsible for the interior of the premises, the systems that serve only the premises, and anything the tenant installs. The landlord usually keeps the roof, the structure, and the common areas, but many leases pass the cost of those items back to the tenant through operating expenses, including the cost of capital replacements. A tenant should ask whether capital items are excluded or amortized, and whether the heating and air conditioning units, which are the most common source of large repair bills, are the tenant's responsibility from day one or only after a warranty period.

Build out, tenant improvements and delivery

If the space needs work before the tenant can open, the lease should state who performs it, who pays for it, and what happens if it is late. A tenant improvement allowance from the landlord is common, but the lease should say when it is paid, whether unused amounts carry over, and whether the landlord can deduct management fees from it. The delivery date should be tied to a defined condition of the space, and the tenant should receive rent abatement or a termination right if delivery is late by more than an agreed period. A commencement date that runs from signing rather than from delivery can leave a tenant paying rent on space it cannot use.

Insurance, indemnity and the landlord's lien

Commercial leases require the tenant to carry liability and property insurance and to name the landlord as an additional insured. The indemnity clause usually requires the tenant to defend the landlord against claims arising in the premises, and a broadly drafted clause can extend to claims caused by the landlord's own negligence. Texas enforces such clauses only if they meet strict fair notice requirements, but a tenant should not rely on that and should negotiate the scope. Texas also gives landlords a statutory lien on the tenant's property in the premises, and most leases add a contractual lien and a right to enter and remove property on default. A tenant with financed equipment should obtain a landlord's waiver so the lender's interest is not displaced.

What landlords should verify before signing

A landlord's review focuses on the tenant's ability to pay and on the remedies available if it does not. The landlord should obtain financial statements, confirm the entity that will sign is in good standing with the Texas Secretary of State, and insist on a guaranty from the principals where the entity is new or thinly capitalized. The default clause should include a short cure period for monetary defaults, a clear right to accelerate, and a waiver of any requirement to mitigate beyond what Texas law imposes. The lease should also address holdover rent at a meaningful premium, since a tenant who stays past the term with no penalty can block a new lease.

Frequently asked questions

Is a letter of intent binding?
Usually not, if it says so, but a letter of intent that omits that language or that the parties act on can create obligations. A letter of intent should state that it is non binding except for confidentiality and exclusivity.

Can a landlord change the locks in Texas?
Yes, for nonpayment of rent, if the landlord follows the procedure in the Texas Property Code, including posting a notice stating where a new key can be obtained. A lease can expand or limit this right.

What is a personal guaranty cap?
A cap limits the guarantor's exposure to a fixed amount or a fixed number of months of rent. A rolling or burn off guaranty reduces the exposure as the tenant builds a payment history. Both are common negotiating points.

How long should the lease term be?
A shorter initial term with renewal options at defined rent protects the tenant, while a longer term with escalations protects the landlord's income. The right answer depends on the cost of the build out and the tenant's confidence in the location.

Key Takeaways

• Commercial leases in Texas are enforced largely as written; there is little statutory protection to fall back on.

• Total occupancy cost includes operating expenses and escalations, not base rent alone.

• Assignment, sublease, renewal, and termination clauses determine whether the tenant can adapt or exit.

• Default remedies and the personal guaranty carry the greatest financial exposure and deserve the closest review.