Part II - Leasehold Improvements
Leasehold improvements include anything that needs to be done to the space that you are going to lease in order to make it fit for your purposes. Your lease should outline who is responsible for making the changes, who is paying for the changes, and what the timeline is for getting it done. It should also make clear who is the decision maker with respect to the leasehold improvements. For example, if new flooring is to be laid do you get to decide the specific type or does the landlord.
Leasehold improvements are subject to negotiation. There is no “normal.” In some circumstances the landlord pays for everything and makes the decisions. In some cases, the tenant will arrange for, pay for and make all of the decisions with respect to the improvements. The most important thing is that it is clear who is doing what.
Common things to be included in leasehold improvements are:
· New paint or wall coverings
· Window coverings
· Light fixtures
· Changes in floor plan
Occasionally the leasehold improvements will include customized items specific to that tenants proposed business. For example, various air exchangers that may be required for a restaurant or mechanic shop.
Often a deal will be struck where by the landlord pays for some of the leasehold improvements and the tenant pays for some. In either case, be clear upon what happens at the end of the lease. In some cases, the tenant is allowed to take fixtures with them (for example, reception desk) and in other cases the landlord requires all leasehold improvements remain at the property. Also, be clear upon whether at the end of the lease you can leave the property as it is or whether you are responsible for returning the property to the state at which is was when you moved in.
Clarity and detail are critical. If your lease says the landlord will pay for new flooring, is he only going to pay for the cheapest laminate available or will you be able to put down any flooring of your choice. Like wise if your leasehold improvements say he will build or renovate front steps to your location, is he required to make it wheelchair accessible? You are far better off having these sorts of conversations in advance of the work beginning, and your decisions agreed upon in writing.
If you are having an issue with a lease you are bound by or are considering entering a commercial lease, we would be happy to talk with you. You can call us at (902) 826-3070 to set up a meeting at our Tantallon law firm or contact us online. You can also schedule a no commitment Issue Review Consult for $100+HST where you have the opportunity to explain your situation to a lawyer and get basic advice before deciding whether or not you'd like to retain us.
If you found this article helpful, you may want to read PREVENT HEARTACHE BY HAVING A LAWYER REVIEW YOUR COMMERCIAL LEASE PART 1.
If you have any questions about your lease for a commercial property in the Halifax, Nova Scotia area you can call us at (902) 826-3070 or email us at firstname.lastname@example.org to set up a meeting with one of our lawyers at our Tantallon law firm. You can also schedule a no commitment Issue Review Consult for $100+HST where you have the opportunity to explain your situation to a lawyer and get basic advice before deciding whether or not you'd like to retain us.
By Dianna M. Rievaj LLB, MBA – Managing Lawyer
The information and materials on this blog are provided for general informational purposes only and are not intended to be legal advice. Nothing contained on this blog is legal advice or constitutes a legal opinion. While it is our goal to provide information which is current, legislative changes and court decisions, among other matters, may result in some information no longer being current or accurate. You should consult a lawyer before relying on any information. The views expressed herein by individual