If you have found the perfect space for your business, but have decided it needs improvements, consider asking your landlord for a Tenant Improvement (TI) Allowance or TI Credit, which is a fixed amount of money a landlord agrees to give a tenant to improve a space. This can help you do things like repaint a space, put up new signage, or even reconfigure the entire layout. Here is some information on how to go about the process of obtaining a TI Allowance or Credit:
- First, both parties agree that improvements are necessary, and they put this agreement in a lease addendum called the Work Letter.
- The landlord maintains the right to oversee and approve each step of the improvement process. It might be the tenant’s responsibility to coordinate the work or get estimates from contractors, but it is the landlord who ultimately reviews all of the work and invoices before paying the contractors.
- If a landlord does not agree to the proposed improvements, they might still allow the tenant to make the changes to the space—but at their own expense. However, even in this eventuality the tenant might still be able to get the cost spread out, or amortized, over the duration of the lease term.
Talk to your landlord to find out if obtaining a TI Allowance or Credit is possible!