The Devil's in the Details: How to Negotiate With Your Landlord

Signing a commercial lease is one of the biggest financial commitments an entrepreneur will ever make, and treating it like a simple apartment rental is a catastrophic mistake. In this episode, Pankaj and Sahil are joined by real estate law expert Robby Pinnamaneni (formerly of LinkedIn, Salesforce, and Facebook) to pull back the curtain on commercial leasing. They break down the most dangerous clauses, from the "non-binding" Letter of Intent that locks you in, to the personal guarantee that can bypass your LLC and put your personal assets at risk. This is a masterclass on how to negotiate, what to look for, and the #1 red flag that tells you to walk away from a deal.

Takeaways

• A commercial lease is NOT an apartment lease. The biggest mistake new business owners make is assuming they have no negotiating power. Unlike a "take it or leave it" residential lease, everything in a commercial lease is negotiable.
• The Letter of Intent (LOI) is NOT casual. Treating the "non-binding" LOI as a simple formality is a massive error. It locks in the material terms and attempting to re-negotiate them later makes you look like a bad-faith partner, killing your leverage before you even start.
• A Personal Guarantee (PG) puts your personal assets at risk. A PG allows the landlord to bypass your LLC or corporation and seize your personal assets (your house, your bank accounts) if your business defaults. You may not be able to avoid it, but it can be negotiated (e.g., limiting the time or amount).
• A "Take It or Leave It" landlord is a massive red flag. A lease is a 5, 10, or 15-year business marriage. If a landlord is inflexible and non-collaborative at the very beginning, it's a preview of how they will behave for the next decade.
• Look beyond the monthly rent. The real costs are hidden in other clauses: rent escalations, maintenance obligations (like a six-figure HVAC replacement), common area maintenance (CAM), and indemnification.

Soundbites

• "In the commercial leasing context, that's not the case. We see a lot of new tenants... feel like they don't have the negotiating power... I think that's incorrect."
• "People assume because most LOIs are non-binding that it's not a big deal... It creates a lot of problems later."
• "Once you sign that LOI, you're now confining yourself, constricting yourself in some ways."
• "What a personal guarantee is, it says that, if that entity is not able to satisfy its obligations, then they're personally going to go after someone else."

Keywords

Commercial Lease, Real Estate Law, Lease Negotiation, Letter of Intent (LOI), Personal Guarantee, Commercial Real Estate, Entrepreneurship, Small Business, Tenant Rights, Landlord, Triple Net Lease (NNN), CAM Charges, Data Centers, Cannabis Real Estate

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Website: carbonlg.com

Connect with Pankaj: https://www.linkedin.com/in/pankaj-raval/

Connect with Sahil: https://www.linkedin.com/in/sahil-chaudry-6047305/

Trademark Watch Service: https://carbonlg.com/introducing-carbon-laws-new-trademark-watch-service/

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