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.
For more FAQs, check out Top FAQs #5, #4 and #3!