Top FAQs: #2
2) Should “Build-Outs” be in my contract? Who pays for the build-out?
Build-Outs are required when the leased space needs to be upgraded or remodeled for the tenant’s commercial needs. Due to the major expense of any construction on a space, this is something that should be a part of the lease. The landlord can negotiate either a turn-key build-out or a flat dollar allowance in order to pay for the modifications.
Turn-Key Build-Out: Here the landlord will cover the entire amount of the build-out. When the landlord does agree to this, rent will often be adjusted (raised) for the possibility of steep construction costs
Flat Dollar Allowance: The tenant can liken this to a construction budget. A flat amount of money will be allotted to the tenant by the landlord. Any incurred costs that exceed the allowance will be the responsibility of the tenant.