Tenant Build Out: How to do a Renovation When You Lease

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For many business owners, leasing an office space is an ideal way to improve their organization. Leasing may allow business owners financial flexibility as well as the chance to secure a quality location for many years without actually purchasing property. However, when businesses need to enhance their office space, lease stipulations can cause renovation challenges. Indeed, planning a tenant build out that doesn’t violate the terms of your lease –– and by extension cause you financial or legal trouble –– can be quite tricky. Thankfully, we’re going to share a few key ways to ensure you’re able to renovate your office space within the terms of your lease. Check them out here:

Review Your Lease Agreement

It is absolutely essential for business leaders to carefully review lease agreements before they sign a legally binding contract with a landlord. Even if you have a good relationship with your landlord, written agreements can make it difficult for you to renovate your office space in the future. While each lease is different, most include a clause relating to alterations and improvements. And generally speaking, these clauses allow tenants the ability to make reasonable, non-structural changes to their rented space. (Note, most business leaders will still need to get approval from a landlord to make even minor changes to a rented space.) Unfortunately, some leases use very liberal language to define “structural” changes. As such, simply changing light fixtures without prior approval may be deemed in violation of a rental lease agreement. Before you begin any renovation plans, review the language in your lease agreement and define what you can and can’t change in your office space.

Structural vs Non-Structural Changes

In most instances, businesses looking to make non-structural changes to their office space shouldn’t have too much trouble working within the confines of their lease agreement. For instance, purchasing new furniture for your office space can be a simple and effective way to improve your work environment. Other temporary measures like non-structural and/or modular walls can help tenants reshape their office space without fundamentally altering the structure of the area.

Structural changes to areas may include load bearing walls, columns, the roof, and the building’s facade. These are often not allowed to be touched by a tenant, but in some instances, landlords may give an exception if they agree to restore the structural changes at the end of their lease. This means these sort of alterations are often, but not always, cost prohibitive for businesses.

Tenant Improvement Money (TI Money)

Another important thing to keep in mind when looking at your lease agreements, is to consider Tenant Improvement Money allowance. This is when the leasing party allows a specified amount of money per sq ft and per year for improvements to your space. Be careful to understand what this money will cover, because landlords often restrict what it can be used on. Most times they only cover things that will improve the overall value of the space, but each agreement is different. When working with Key Interiors, we work directly with you and your leasing company to bill the correct amount to each party in order to eliminate any confusion.

Working with Your Landlord

Perhaps the most straightforward way to ensure you’re able to improve your office space without violating the terms of your lease is to speak with your landlord in advance in regards to tenant build out. Good landlords shouldn’t have any problem approving minor changes you want to make within your rented space. What’s more, business leaders may be able to convince their landlord to allow more ambitious renovations under certain conditions. It may be mutually beneficial to a business owner and a landlord to restore a building’s facade, for example. You may also be able to rework your lease to allow for more significant alterations.

Contact the Pros

At Key Interiors, we have years of experience helping businesses navigate rental agreements to enact much-needed renovations, redesigns, and general tenant build out examples. Before you try to negotiate with a landlord on your own, make sure to contact our team first. We can help you determine your renovation needs, put you in contact with other helpful professionals in the industry, and create a plan that will work for all parties involved.

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