How to review a lease agreement in Word

Leases run for years, and small wording choices about rent increases, repairs or default can cost a client a lot over that time. This guide covers a practical lease review in Microsoft Word for commercial and residential leases, and how LexDraft can help you mark one up faster.

Before you start: commercial or residential, and which state

Residential leases are shaped heavily by state and local rules on deposits, notice and habitability. Commercial leases leave more to negotiation, which means more to read. Either way, the state matters. LexDraft works under US law, covering federal law, all 50 states and D.C. It knows state-specific notice and venue rules, and it flags clauses that may be unenforceable in the state you select.

Step by step: review a lease in Word with LexDraft

1. Open the document in Word. LexDraft is a Word add-in from Microsoft AppSource. It opens as a side panel in Word 365 (Windows and Mac), Word 2021 and Word on the web, so there is nothing to upload and no other app to learn.
2. Set the job. Select the state, then run the review. LexDraft reviews the lease for risky clauses, missing standard terms and state-specific red flags. Its four built-in playbooks cover NDA, SaaS MSA, DPA and Services, so for a lease the review works from the document and the state you choose.
3. Read the findings by severity. Each finding is graded Critical, High, Medium or Low. Start with Critical and High, then decide how much time the rest deserve.
4. Run the quick checks. The defined-term and cross-reference checks are rule-based and run without AI. They catch terms that are used but never defined, terms defined but never used, and references such as "Section 5.3" or "Exhibit B" that point nowhere. Each finding has a jump link to the exact spot.
5. Accept or reject each redline. Proposed changes are word-level edits, so only the words that need to change are touched. When you accept one, it lands as a native Word tracked change, ready for the other side.
6. Ask about anything unclear. Use the LexDraft chat in the Word sidebar to get a plain-English explanation of a clause, then ask follow-up questions in the same chat.
7. Do your own final read. AI review can miss issues or be wrong. Qualified counsel must check every output before it goes out.

What to check in a lease

• Parties and premises. Confirm the legal names, the guarantor if any, and an exact description of the space, including parking, storage and common areas.
• Term and renewal. Check the start date, any conditions on it, renewal options and the notice needed to exercise them.
• Rent and increases. Look at base rent, fixed or index-based increases, and when rent starts if there is a free period.
• Operating costs. In commercial leases, check what counts as operating expenses or common area charges, any caps, and audit rights.
• Security deposit. Check the amount, when it is returned and what can be deducted. States set different rules for residential deposits.
• Use. A narrow use clause can block a tenant's business from growing or being sold.
• Repairs and maintenance. Who fixes the roof, the structure and building systems? Vague splits lead to disputes.
• Alterations. Check consent rules and whether the tenant must remove changes at the end.
• Assignment and subletting. Look for consent standards, recapture rights and profit sharing.
• Insurance and indemnity. Match the required policies to what the client actually carries, and check that indemnities run both ways where they should.
• Default and cure. Check notice and cure periods, the landlord's remedies and any acceleration of rent.
• End of term. Review holdover rent, restoration duties and early termination rights.

Common lease review mistakes

• Checking the rent schedule but not the definitions that feed it, such as "Operating Expenses" or "Tenant's Share". The defined-term check flags terms used without a definition.
• Missing references to exhibits that were never attached. The cross-reference check finds references with no target.
• Using a form from another state without checking local deposit and notice rules.

Drafting a lease instead?

LexDraft also drafts leases. Describe the lease in plain English, answer a few questions about the parties, the state and key terms, and LexDraft writes a first draft into your Word document. You can also start from the lease agreement template.

This guide is general information, not legal advice. LexDraft does not give legal advice; qualified counsel must review every draft. Spotted something out of date? Email support@lexdraft.ai and we will fix it.