A commercial lease is usually the largest financial commitment a small Utah business makes, and it comes with almost none of the statutory protection that applies to residential tenants. Commercial leasing in Utah runs on freedom of contract, which means the document is the law between you and the landlord.
Last updated: October 2026
Key Takeaways
- Utah’s residential tenant protections do not carry over to commercial leases. Whatever the lease says generally governs.
- A lease longer than one year is void in Utah without a signed writing.
- The personal guarantee is usually the single largest risk in the document, and it survives the business closing.
- Restoration and surrender obligations at the end of term are frequently more expensive than the tenant improvement allowance at the start.
- Verify zoning and permitted use before signing, not after. This is the most expensive avoidable mistake in commercial leasing.
Why a commercial lease is different
Residential tenants in Utah have a set of statutory protections around habitability, notice, and deposits. Commercial tenants largely do not. The presumption in commercial leasing is that both parties are sophisticated businesses capable of negotiating their own terms, so the courts enforce what was written.
The practical consequence: there is no statutory backstop waiting to rescue you from an unfavorable clause. Everything has to be caught before signature.
Two Utah rules do apply directly. Under Section 25-5-3, a lease of real property for longer than one year is void unless it is in writing and signed. And under Section 25-5-4, a personal guarantee, which is a promise to answer for another’s debt, must also be in writing and signed.
The guarantee is the clause that matters most
Most landlords in the Salt Lake and Utah County markets will ask a small business tenant for a personal guarantee. It converts a business obligation into a personal one, and it does not disappear when the business does.
A personal guarantee means the landlord can pursue you individually for the remaining rent even after the company has closed, the doors are locked, and the entity has been dissolved.
The LLC liability shield at Section 16-20-304 does not reach a guarantee you signed personally
You will usually not get the guarantee removed entirely. You can often limit it, and these four asks are commonly granted:
- A cap. Limit the guarantee to a fixed number of months of rent rather than the entire term.
- A burn off. The guarantee expires after a period of on time payment, commonly two or three years.
- A good guy clause. The guarantee ends if you surrender the space properly with notice, even if you leave early.
- Naming only one guarantor. If there are three owners, do not let all three sign jointly and severally without discussing it.
The full review, clause by clause
| Clause | What to check | Why it costs money |
|---|---|---|
| Permitted use | That it covers what you actually do, and future plans. | A narrow clause blocks pivots and sublets. |
| Base rent and escalations | The escalation formula, and whether it compounds. | A three percent annual escalator raises rent about 34 percent over ten years. |
| Operating expenses and CAM | Whether it is capped, and what is excluded. | Uncapped pass throughs are open ended. |
| Personal guarantee | Cap, burn off, good guy clause. | Survives the business. |
| Term and renewal | Option terms, and the deadline to exercise them. | Missing a notice date can cost the option. |
| Assignment and subletting | Whether consent may be unreasonably withheld. | Blocks your exit and blocks a sale of the business. |
| Tenant improvements | Who pays, who owns them, and who removes them. | Allowances are often clawed back at the end. |
| Restoration and surrender | Whether you must return the space to original condition. | Frequently exceeds the improvement allowance. |
| Maintenance and repair | Who is responsible for HVAC, roof, and structure. | A triple net lease can put a roof on your books. |
| Insurance | Limits, additional insured requirements, waiver of subrogation. | Non-compliance is a default. |
| Default and cure | Notice you get, and time to fix. | A short cure period turns a late payment into a termination. |
| Holdover | The multiple applied if you stay past the term. | Holdover rent of 150 to 200 percent is common. |
| Relocation | Whether the landlord can move you. | Disrupts operations, often at your cost. |
| Casualty and condemnation | What happens if the building is damaged. | Determines whether you can walk away. |
The three clauses tenants regret most
Restoration. A clause requiring you to return the premises to their original condition means removing the improvements you paid to install. Tenants who negotiated a generous improvement allowance and ignored the restoration clause have paid for the same work twice. Ask for a written waiver of restoration for the specific improvements being made now, at the time of the build out.
Assignment. If the landlord’s consent to assignment can be withheld for any reason, you cannot readily sell the business, because the buyer needs the space. The standard ask is that consent “shall not be unreasonably withheld, conditioned, or delayed.”
Operating expense pass throughs. In a triple net lease, uncapped CAM charges can rise faster than base rent. Ask for a cap on controllable expenses, commonly a fixed percentage per year, with taxes and insurance carved out.
Do this before you sign anything
- Confirm zoning and permitted use with the city. Salt Lake City handles this through its business licensing office; every other city runs its own process. Discovering after signature that your use is not permitted at that address is the most expensive avoidable mistake in commercial leasing.
- Verify the landlord actually owns it. The county recorder is the check. If you are dealing with a property manager, confirm their authority.
- Read the exhibits. The rules and regulations exhibit contains real obligations and is almost never read.
- Model the full term. Base rent, escalations, estimated CAM, and the restoration cost at the end. Compare that number to the one in the broker’s summary.
- Diary every notice deadline. Renewal options, termination notices, and estoppel response windows.
Deadlines if something goes wrong
A lease is a written contract, so a claim under it carries the six year limitations period at Section 78B-2-309. If the lease has an attorney fee clause, Section 78B-5-826 makes it reciprocal, so a clause drafted for the landlord is available to a prevailing tenant. Where the lease is silent on interest, Section 15-1-1(2) supplies ten percent per year.
For the general framework, see the Utah contract review checklist and contract lawyers in Utah.
Frequently Asked Questions
Do Utah’s tenant protection laws apply to a commercial lease?
Generally no. Utah’s residential protections do not extend to commercial tenancies. Commercial leasing runs on freedom of contract, so the lease document itself governs and there is little statutory backstop.
Can I avoid a personal guarantee on a commercial lease?
Removing it entirely is uncommon for a small business tenant. Limiting it is realistic: a cap of a fixed number of months, a burn off after a period of on time payment, or a good guy clause that ends the guarantee on proper surrender.
Does my LLC protect me from the lease guarantee?
No. Section 16-20-304 protects members from company debts, but a guarantee is a separate promise you made personally. The entity’s shield does not reach it, and it survives dissolution of the company.
Does a commercial lease have to be in writing in Utah?
If it runs longer than one year, yes. Section 25-5-3 makes a lease of real property for more than a year void unless it is in writing and signed by the party to be charged.
What is a restoration clause and why does it matter?
It requires you to return the space to its original condition at the end of the term, which can mean removing improvements you paid to install. The cost frequently exceeds the tenant improvement allowance you received at the start.
What is a reasonable cap on CAM charges?
There is no statutory figure. The common structure is a cap on controllable operating expenses at a fixed annual percentage, with taxes, insurance, and utilities carved out as uncontrollable.
Can my landlord refuse to let me assign the lease if I sell my business?
If the lease allows consent to be withheld at the landlord’s discretion, yes, and that can block a sale. Negotiating that consent may not be unreasonably withheld, conditioned, or delayed is a standard and usually achievable ask.
How long do I have to sue over a lease dispute in Utah?
Six years, because a lease is a written contract under Section 78B-2-309. The clock runs from the breach.
Reviewing a lease before you sign costs a fraction of one month of rent under terms you should have negotiated. If there is a guarantee attached, that is the clause to look at first.
Contact Jeremy Eveland or call (801) 613-1472. Offices in West Jordan and Lindon, serving Salt Lake County and Utah County.
This article is general information, not legal advice. Reading it does not create an attorney-client relationship. Statutes change, and the citations here reflect Utah law as of October 2026.