Welcome to part 3 of the Lease Space like an Expert series where we will include explanations of terms from a lease that can easily cause confusion or be misinterpreted – often leading to unforeseen expenses for tenants.
This month’s topic: Alterations and Additions
What is a Leasehold Improvement?
A leasehold improvement consists of alterations made to rental premises in order to customize it for the specific needs of a tenant. Leasehold improvements include painting, installing partitions, changing the flooring, putting in customized light fixtures and so on. Leasehold improvements can either be undertaken by landlords, who may offer to do so to increase the marketability of their rental units, or by the tenants themselves.
Things to Note:
A Lease should include a clause that indicates the tenants allowance for Leasehold improvements. It should also clearly layout who is responsible for paying for the work that will be done. This is usually found under The Tenant Improvements clause or Alterations and Additions clause.
For more info about alterations and improvements visit: http://www.nolo.com/legal-encyclopedia/clb-alterations-improvements-commercial-tenancy.html
Disclaimer: GREY AREAS EXIST as each commercial landlord operates differently. So it is crucial you don’t assume or ignore the fine print. Understanding what you are on the hook for, or not, will save you time and money later on. And if your potential landlord doesn’t have the time to sit down and walk you through your lease – you may want to consider what the relationship will be like in the future.
MAKE SURE YOU UNDERSTAND WHAT YOU SIGN.