A commercial lease and a residential tenancy share a name and very little else. The differences follow from an assumption that both parties are commercial actors capable of negotiating.
The default protections are largely absent
Residential tenancy law imposes minimum standards, restricts grounds for ending a tenancy and limits what can be charged, because the tenant is presumed to need protection.
Commercial leases start from the opposite presumption, so most terms are whatever the parties agreed and are enforced as written.
The practical consequence is that a commercial tenant's position is defined by the document rather than by statute, which makes the drafting the substance of the deal.
Cost allocation is the central negotiation
Leases differ in how far operating costs pass to the tenant. At one end the rent covers everything; at the other the tenant bears taxes, insurance and maintenance separately.
Because these structures exist along a spectrum, two quoted rents are not comparable until the allocation behind each is known.
A rent that appears low can carry obligations that make total occupancy cost higher than a fully inclusive alternative.
Repair obligations can extend to the structure
Full repairing terms can make a tenant responsible for the condition of the building, including elements they had no part in constructing.
Where the obligation is to return the property in good repair, the tenant may be required to improve on the condition at the start of the lease.
Recording the condition at commencement is therefore an important protection, since it establishes the baseline against which the obligation is measured at the end.
Claims for disrepair at expiry are settled in money rather than in work far more often than tenants expect, which turns a maintenance obligation into a final bill.
Terms are long and exit is difficult
Commercial leases commonly run for years, and the obligation to pay rent continues whether or not the business occupies the space or continues trading.
Assignment and subletting are usually permitted only with consent and often leave the original tenant liable if the replacement defaults.
Break clauses provide an exit but are typically conditional, and failure to satisfy a condition precisely can invalidate the break entirely.
Rent review changes the economics mid-term
Long leases usually include periodic reviews that reset the rent by reference to market levels or an index.
Many reviews operate upward only, meaning rent can rise at review but cannot fall, which shifts market risk to the tenant across the whole term.
The mechanics of review, the treatment of tenant improvements and the security available at expiry all vary by jurisdiction, and each is a point where advice pays for itself.