Seattle Commercial Lease Attorney

Written by Kim Sandher, JD 16 Years Handling Commercial Real Estate Matters in Seattle Washington State Bar #42630  |  Admitted 2010 U.S. District Court, Western District of Washington, Admitted 2011 Recognized: Best Lawyers in America® 2026  |  Best Law Firms® 2026, Regional Tier 2 Seattle

A retail tenant signs a lease in Capitol Hill. The rent looks right. The security deposit is three months, steep, but they need the space. Six months later a CAM reconciliation statement arrives adding $8,000 to what they owe. The lease says so. They agreed to it. The problem was never the rent.

There is no standard commercial lease in Seattle. Every lease reflects the property, the market, the parties, and what each side was willing to push for. In 16 years of handling commercial real estate matters in Seattle and King County, I’ve reviewed hundreds of them. The ones that generate disputes usually have the same issue: one party signed without understanding what they were agreeing to.

K&S Canon handles commercial lease review and negotiation for tenants and landlords throughout Seattle, from Capitol Hill retail to South Lake Union office to SoDo industrial. We also handle disputes when a signed lease turns into a conflict over CAM charges, assignment rights, or early termination. See our commercial leasing practice page and our blog on contract clauses that cost Seattle businesses thousands.

What are Seattle’s commercial lease security deposit and guaranty limits?

SHORT ANSWER Under Seattle Ordinance 126982 (SMC 6.104), effective January 27, 2024, security deposits on new eligible commercial leases cannot exceed the first and last month of base rent combined. Personal guaranties are capped at two years of base rent plus the landlord’s cost of tenant improvements. These caps apply to retail and commercial leases but NOT to office space, R&D labs, or medical practices.

Seattle’s commercial lease guaranty ordinance changed the baseline for new retail and commercial leases in ways many landlords and tenants still don’t fully understand, two years after it took effect.

Before January 27, 2024, a Seattle landlord could require a new retail tenant to deposit three to six months’ rent, obtain an unlimited personal guaranty, and require letters of credit on top of both. None of that was legally capped. For small business owners, the people most likely to be signing commercial leases rather than owning their buildings, this created a significant financial barrier.

SMC 6.104 changed that for eligible commercial properties. Here is what the ordinance actually requires:

Provision	What SMC 6.104 Requires	Applies To
Security deposit + letters of credit (combined)	Cannot exceed first month + last month base rent	Eligible commercial/retail leases only
Personal guaranty	Cannot exceed 2 years base rent + landlord-funded TI costs	Eligible commercial/retail leases only
Landlord notice obligation	Must provide FAS summary to tenant at time of new lease offer	All commercial lessors in Seattle
Violation penalty	$500 first violation / $1,000 subsequent; private right of action; up to $20,000 liquidated damages	All commercial lessors in Seattle

What the ordinance does NOT cover

The exemptions in SMC 6.104 matter as much as the protections. The ordinance’s definition of “commercial property” explicitly excludes office space, research and development laboratories, medical practices, and government-owned properties. A software company leasing an open-plan office in South Lake Union gets no security deposit cap. A boutique retailer on Broadway gets the full protection.

Important for landlords using old templates Many commercial landlords are still using lease templates drafted before January 27, 2024. If those templates include security deposit or guaranty provisions that exceed SMC 6.104’s limits for eligible properties, the landlord is in violation and exposed to civil penalties and a private right of action from the tenant. This is not a theoretical risk, the ordinance has been in effect for over two years.

The ordinance also applies only to new leases, not extensions of existing leases. If you’re renewing a pre-2024 lease with no material changes, SMC 6.104 does not require renegotiation of existing guaranty terms. It does apply the first time a new lease agreement is executed for that tenant or any other.

Does Seattle require notarization for a commercial lease?

SHORT ANSWER No. Washington State eliminated the notarization requirement for commercial leases effective June 6, 2024 under SSB 5840 (amending RCW 59.04.010 and RCW 64.04.010). Leases of any duration no longer require acknowledgment, witnesses, or seals to be valid and enforceable, with one exception: if the lease or a memorandum of lease is to be recorded, notarization is still required under RCW 64.04.010.

Washington was one of a small number of states that required notarization for commercial leases longer than one year. That requirement created friction, particularly for leases executed electronically, and had been used by tenants to challenge lease enforceability when the notarization was defective.

SSB 5840, signed by Governor Inslee on March 13, 2024 and effective June 6, 2024, resolved this. For most Seattle commercial leases today, parties can sign without notarization and the lease is valid. The exception is if you want the lease or a memorandum of lease recorded in the public land records, recording still requires acknowledgment under RCW 64.04.010. In most commercial transactions, recording a memorandum of lease is advisable for leases over five years to protect the tenant against a future sale of the building.

SSB 5840 (effective June 6, 2024) + RCW 59.04.010 (amended) + King County Recorder’s Office at 201 S. Jackson St. = the current framework for lease execution and recording in Seattle.

What to negotiate in a commercial lease in Seattle

SHORT ANSWER The five provisions that generate the most commercial lease disputes in Seattle are CAM charge definitions and audit rights, personal guaranty scope (now capped under SMC 6.104 for eligible leases), assignment and sublease rights, tenant improvement obligations, and use clause restrictions. Each reflects where lease risk transfers between landlord and tenant, and where the market gives either side leverage to negotiate.

Every commercial lease is different. The negotiating leverage depends on the property, the market, and the parties. With downtown Seattle office vacancy at 35.6% as of Q4 2025, tenants leasing office space have more negotiating power than at any point in the past decade. Retail on Capitol Hill’s Pike/Pine corridor operates under a different dynamic, tighter supply, premium demand from tourism and local demographics.

That context matters for what you push for and what you accept. Here are the provisions that regularly determine whether a lease works well or generates disputes:

CAM charges, the most common source of disputes

In a triple net lease, the tenant pays base rent plus a proportionate share of Common Area Maintenance charges. The problem is that “CAM charges” means whatever the lease says it means. Vague or landlord-favorable definitions can add significant unexpected costs.

In Seattle buildings operating at high vacancy, particularly in the downtown core and SoDo, gross-up provisions allow landlords to calculate CAM charges as if the building were 100% occupied. Your proportionate share of operating expenses can be materially higher than actual costs suggest, because the denominator (occupied space) is being treated as full when it isn’t.

Key CAM provisions to negotiate before signing:

Provision	What it does	What to seek	Typical landlord position	Outcome if not negotiated
Management fee	Landlord charges % of operating costs as management fee	Cap at 5% of controllable costs; exclude from grossing-up	10-15% of all operating expenses	Open-ended management fees passed through annually
Capital expenditures	Major building repairs may be passed to tenants	Exclude or amortize over useful life; exclude items benefiting only other tenants	Full pass-through in year incurred	One-time large repair billed in full to tenants
Audit rights	Right to verify CAM calculations	12 months from statement receipt; landlord pays if overcharge exceeds 5%	Short audit window; tenant pays all audit costs	CAM overcharges go undetected
CAM cap	Annual limit on increases in controllable expenses	3-5% annual cap on controllable expenses	No cap offered	CAM increases unlimited year to year
Gross-up cap	Limits how far landlord can gross-up for vacancy	Cap at 95% or require actual cost basis	100% gross-up to full occupancy	CAM inflated significantly in high-vacancy buildings

Personal guaranty

For eligible Seattle commercial leases (retail, food/beverage, similar commercial use, not office), SMC 6.104 caps the personal guaranty at two years of base rent plus landlord-funded TI costs. This is now the legal baseline for new leases.

But the cap still leaves meaningful negotiating room. A “good guy” guaranty clause terminates the personal guaranty upon proper written notice of vacation, surrender of the premises, and payment of all rent through the move-out date. This protects the guarantor from ongoing liability if the business closes, the guaranty ends when the landlord regains the space. Not all landlords offer this, but it’s a reasonable request and worth pushing for.

Assignment and sublease

Most Seattle commercial leases require landlord consent to assign or sublease. The consent standard matters, “sole discretion” gives the landlord near-absolute control; “reasonable consent” gives you legal recourse if the landlord withholds consent arbitrarily.

Watch for recapture rights: a landlord’s contractual right to terminate your lease and take back the space if you request an assignment. In a tight market, a landlord may prefer to take the space back and re-lease at current rates. Negotiate to limit or eliminate recapture rights, or require recapture only if the landlord actually re-leases within 90 days.

Use clause

A narrow use clause limits what your business can do in the space. A broad use clause gives you flexibility. Before signing, confirm with the landlord and with Seattle’s Department of Construction and Inspections (SDCI) that your specific intended use is both permitted under the lease and permitted under SMC Title 23 zoning. A restaurant use in a light industrial zone, or a cannabis retailer within 1,000 feet of a school or playground (or 500 feet of a public park), may require a Master Use Permit or may not be permitted at all.

Tenant improvements

The work letter defines who controls construction, what specifications apply, and what happens if improvements aren’t complete by the lease start date. Negotiate rent abatement (not just a lease start delay) if the space isn’t delivered on time. Confirm that the landlord’s TI allowance covers your actual build-out, allowances negotiated in 2022 or 2023 may not reflect current construction costs in Seattle.

What does a commercial lease review cover?

SHORT ANSWER A commercial lease review at K&S Canon covers lease term and rent structure, SMC 6.104 compliance for eligible properties, CAM charge definitions and audit rights, personal guaranty scope, assignment and sublease provisions, use clause and zoning verification, tenant improvement obligations, and exit rights. We handle lease review for tenants and landlords in Seattle’s retail, office, and industrial markets.

The purpose of reviewing a commercial lease before signing is not to find reasons not to sign. It is to understand what you are agreeing to, and to identify where the terms can be improved before they become binding.

In 16 years of reviewing commercial leases in Seattle, the provisions that most frequently surprise clients after signing are not the rent, it’s the CAM definitions, the guaranty scope, the assignment restrictions, and the build-out obligations. These provisions are in the fine print of every lease. They’re not hidden. But they require knowing what to look for.

For landlords, lease review serves a different purpose: confirming that the document reflects the deal terms, that SMC 6.104 caps are properly accounted for in eligible properties, and that the remedies section gives the landlord real tools when a tenant defaults.

K&S Canon handles lease review for both sides. We work with retail tenants opening on Capitol Hill, Pike/Pine, and Ballard Avenue; office tenants in South Lake Union, First Hill, and Belltown; and industrial tenants in SoDo and Georgetown. We also handle lease disputes when the review didn’t happen before signing.

Commercial leasing at K&S Canon

SHORT ANSWER K&S Canon PLLC handles commercial lease review, negotiation, and disputes for tenants and landlords in Seattle and King County. Our office at 1200 5th Avenue, Suite 1950 is located in the same building as some of Seattle’s largest commercial real estate transactions. Kim Sandher, JD (Washington Bar #42630, admitted 2010). Call (206) 507-4009.

We handle commercial lease matters at multiple stages, before signing, during disputes, and at lease renewal or assignment. The best time to involve an attorney is before the lease is signed. By the time a CAM dispute surfaces or a landlord refuses to consent to an assignment, the terms are already binding.

That said, post-signing disputes are part of the practice. We handle commercial real estate disputes in King County Superior Court and through mediation, including CAM overcharge claims, guaranty disputes, and lease termination conflicts.

For businesses opening in Seattle, retail, restaurant, service, or professional, we can also connect lease review with entity formation, making sure the legal entity signing the lease has the proper corporate authority to do so and that the principals understand their personal exposure under the guaranty.

K&S Canon PLLC: Commercial Leasing Kim Sandher, JD  |  Washington Bar #42630 1200 5th Avenue, Suite 1950, Seattle, WA 98101 Phone: (206) 507-4009 kscanon.com/contact-us

Common commercial lease mistakes Seattle businesses make

SHORT ANSWER The most common commercial lease mistakes in Seattle are signing before verifying the use is permitted under SMC Title 23 zoning, accepting CAM provisions without audit rights, signing a guaranty without understanding the personal liability scope, and not confirming whether SMC 6.104 caps apply to the specific property type. Each of these mistakes is fixable before signing and difficult to fix after.

Signing before verifying permitted use

SMC Title 23 governs permitted uses in each Seattle zoning district. A lease signed for a use that isn’t permitted in that zone creates a problem that the lease cannot fix. Before signing any Seattle commercial lease, confirm with Seattle SDCI that your specific intended use is allowed at that address. Some uses, restaurant conversion, cannabis retail, daycare, medical clinic, have additional location requirements or require a Master Use Permit.

Assuming “standard” CAM terms are non-negotiable

There is no standard CAM clause in Seattle. Every CAM provision reflects what the parties negotiated, or failed to negotiate. A landlord presenting a “standard” form is presenting the terms they prefer. Audit rights, expense caps, and management fee limitations are all negotiable before you sign. They are much harder to dispute after the fact.

Not understanding the personal guaranty scope

For eligible commercial leases (retail, food service, general commercial, not office), SMC 6.104 now caps the personal guaranty. But many tenants don’t know this, sign pre-2024 templates with non-compliant provisions, and don’t realize the landlord may be in violation of the ordinance. Understanding what you’ve agreed to, and what you’re legally entitled to, requires reading the lease with the current ordinance in mind.

Missing the zoning step entirely

A business signs a lease. Construction begins. Then the tenant discovers the intended use requires a Master Use Permit that takes six months to obtain, or isn’t permitted at all. This scenario happens in Seattle. It’s preventable. Seattle’s zoning map and use tables are publicly available. Confirming permitted use is one of the first steps in any lease review.