Commercial lease checklist
Commercial lease checklist before signing
Before committing to a commercial lease, check whether the site can carry the rent, opening costs, downside trading, and lease obligations. A low headline rent can still become expensive if the numbers and lease terms are not pressure-tested.
YieldLens UK provides indicative decision-support only. It is not a valuation, financial advice, mortgage advice, legal advice, tax advice, or a substitute for professional due diligence.
Quick answer
Rent burden
Break-even customers or sales
Staffing and known monthly costs
Business rates
Utilities and insurance
Service charge
Fit-out and setup costs
Rent deposit
Rent-free period
Break clause
Rent review
Repairing obligations
Permitted use
Planning and licensing
Downside trading
Cash buffer after opening
Why the checklist matters
Commercial lease mistakes are expensive because rent is only one part of the risk.
Tenants often focus on the headline rent and miss the wider economics that make a site workable or fragile.
Check the rent burden
Rent burden is monthly rent divided by expected monthly revenue.
Use it as an early screen, not as a final answer.
Screening thresholds
Healthier
12%
Caution
18%
High pressure
Above 18%
Worked example
Annual rent: £60,000
Monthly rent: £5,000
Expected monthly revenue: £24,960
Rent burden: about 20%
Twenty percent is high enough to require stronger evidence, not just optimism.
Check break-even customers or sales
Convert the lease into a customer target.
A lease can look affordable until fixed costs become a daily customer requirement.
Break-even example
If the known monthly cost base is £14,100 and average spend is £12 across 26 opening days, break-even is about 45 customers/day.
What it means
If expected customers/day is 80, the site has room on paper, but the footfall assumption still needs evidence.
Check upfront cash before opening
A cafe can fail on opening cash even if monthly rent looks manageable.
Fit-out, deposit, legal fees, opening stock, signage, launch marketing, and starting cash all matter because they can drain cash before the site begins trading.
Fit-out: £50,000
Rent deposit: £15,000
Legal fees: £3,000
Opening stock: £8,000
Other setup: £5,000
Starting cash: £90,000
Upfront cash needed: £81,000
Opening buffer: £9,000
Why it matters
A £9,000 buffer is thin if fit-out overruns, trading starts slowly, or lease costs are higher than expected. The monthly rent may be manageable, but the opening cash stack still needs room to breathe.
Check downside trading
Do not only test the base case.
The lease should still make sense if revenue is weaker than expected.
Base revenue: £24,960
60% downside revenue: £14,976
Known cost base: £14,100
Downside monthly position: £876 surplus
Interpretation
The downside month still covers known costs, but that does not remove the need to check opening buffer and lease terms.
Lease terms to check
Ask the lease questions before the numbers become a commitment.
Use this as a commercial review list, then ask your solicitor to review the legal wording.
Rent-free period
Ask: How long is the rent-free period, and does it cover the period when fit-out and launch costs are highest?
Why it matters: A rent-free period can protect opening cash when the site is not trading at full strength.
Rent review
Ask: How often is rent reviewed, and is the review formula linked to inflation, open market rent, or another mechanism?
Why it matters: A borderline site can become much more expensive if rent steps up faster than trading improves.
Service charge
Ask: What does the service charge cover, and is there a cap or estimate that limits surprise costs?
Why it matters: Extra service charge can narrow the margin quickly when rent burden is already high.
Break clause
Ask: Is there a break clause, when can it be used, and what conditions must be met for it to work?
Why it matters: A break clause can limit downside if the site underperforms after opening.
Repairing obligations
Ask: Is the tenant responsible for internal only repairs, full repairing, or a more limited schedule of responsibility?
Why it matters: Repairing obligations can create hidden cost exposure that is easy to miss from headline rent alone.
Deposit terms
Ask: How much deposit is required, when is it held, and on what terms can it be returned?
Why it matters: A larger deposit reduces opening cash and can make the first months feel tighter than expected.
Permitted use
Ask: Does the lease allow the business model you actually plan to run, including food, drink, takeaway, or retail activity?
Why it matters: If permitted use is too narrow, the site may not support the full business plan.
Assignment and subletting
Ask: Can the lease be assigned or sublet if the site later needs to be sold or restructured?
Why it matters: A flexible lease can reduce the downside if plans change.
Handover condition
Ask: What condition will the unit be in on handover, and who is responsible for making it usable?
Why it matters: Handover condition affects fit-out cost, delay risk, and opening cash.
Planning and licensing
Ask: Are planning permission, licensing, or other consents needed for the intended use?
Why it matters: A lease can look fine commercially but still fail if the use cannot be operated as planned.
Nearby restrictions
Ask: Are there exclusivity rights, non-compete clauses, or nearby restrictions that change the trading opportunity?
Why it matters: Local restrictions can materially affect footfall, trade mix, and the value of the site.
Evidence to collect before committing
Collect the evidence that makes the checklist real.
Trading evidence
Cost evidence
Lease and legal evidence
Related pages
Use the checklist alongside the restaurant and cafe pages.
These pages keep the same pressure-test framing but break the problem into simpler parts.
Restaurant lease viability check
Use the restaurant page when the site is a dining concept rather than a simpler cafe or retail unit.
Salon lease viability check
Use the salon page when treatment capacity and chair use drive the numbers.
Commercial lease viability check
Read the core commercial lease pressure-test before you run the check.
Commercial rent burden calculator
See how monthly rent compares with expected revenue.
Break-even customers calculator
Convert rent and costs into a daily customer target.
Commercial lease survival calculator
Check whether the site can survive weaker trading and opening pressure.
How it works
Learn how the free check, paid file, and sample report fit together.
Sample commercial viability file
See the kind of output the £49 paid file produces.
Viability file
Read what the paid Standard commercial viability file includes.
Worked example
Redacted high street site
This example is fictional and redacted. It shows the shape of the affordability question without exposing a real tenant or address.
Business type
Cafe
Address
Redacted high street site
Postcode
NW6 sample
Annual rent
£60,000
Expected customers/day
80
Average spend
£12
Opening days/month
26
Monthly revenue
£24,960
Rent burden
20%
Break-even
about 45 customers/day
Opening buffer
£9,000
Downside monthly position
£876 surplus
Verdict
This is not automatically unworkable, but the rent burden is high and the opening buffer is thin. It needs footfall evidence, confirmed fit-out costs, and sharper lease terms before the numbers feel comfortable.
How YieldLens helps
Turn the checklist into numbers you can challenge.
The free commercial check produces the core metrics. The £49 file adds deeper analysis and action items.
Free check outputs
£49 file adds
FAQ
Commercial lease checklist questions
Short answers for people trying to decide whether a site is worth a deeper look.
What should I check before signing a commercial lease?
Start with rent burden, break-even customers or sales, upfront cash, downside trading, service charge, rent review, repairing obligations, break clauses, and permitted use. Then ask a solicitor to review the legal terms.
Should I sign a lease based only on rent?
No. Rent is only one part of the risk. Fit-out, deposit, staffing, rates, utilities, and lease clauses can change the real economics materially.
What is rent burden?
It is monthly rent divided by expected monthly revenue. YieldLens uses 12% as a healthier screen and 18% as a caution threshold. Those are YieldLens screening thresholds, not universal rules.
What is a break clause?
A break clause is a contractual exit point. It matters because it can reduce the downside if the site underperforms after opening.
Why do repairing obligations matter?
Repairing obligations can create hidden costs and responsibility for damage or upkeep that are not obvious from the headline rent.
Should I get a solicitor before signing a commercial lease?
Yes. YieldLens can help with the commercial pressure-test, but a solicitor should review the lease and related legal documents before you commit.
Can YieldLens review my lease?
YieldLens does not review legal documents. It helps you structure the commercial numbers and questions before you commit to a lease.
Can YieldLens tell me whether to sign?
No. YieldLens UK provides indicative decision-support only. It helps you pressure-test the numbers and questions, but it does not tell you to sign or not sign.
Pressure-test the lease numbers before you commit.