Office Lease Checklist
When negotiating the lease for an office space, the same issues frequently arise. This article is the second in a series of three articles that provide office lease checklists for office tenants to use to review their office lease. For more information on how to review your office lease, see Office Lease Checklist (Part 1) and Office Lease Checklist (Part 3). Use the checklists this three part series to make sure your office lease reflects what your tenant representation broker negotiated and to make sure problems won’t arise during your tenancy.
These office lease checklists are just a starting point. Office tenants should retain a qualified, experienced tenant representation broker to negotiate their lease and a commercial real estate attorney to negotiate and review their lease contract.
Office Lease Checklist: What Does the Work Letter Cover?
Build-out controlled by landlord
- Tenant should have approval over any work plans.
- Commencement date should not occur until all work has been approved by tenant’s or landlord’s architect as substantially completed, AND the tenant has received a certificate of occupancy for the improvements.
- When will the tenant be responsible for costs that run over the allotted budget? Until everything on the punch list is finished there should be some hold back.
- Is the tenant granted a termination right if the leased property is not handed over in the agreed-upon time frame?
- Is the tenant allowed to enter the premises to install furniture, fixtures, etc. before work has been substantially completed?
- Will the construction be completed by bid?
- What control will the tenant have over the construction process? Will their approval be required for items such as the budget, major contractors, and schedule? If the tenant must pay construction costs it is crucial to have these requirements.
- Is the schedule for the tenant’s deliveries and approvals reasonable?
- Is the process fo making changes to the original scope of work clear?
- How much is the construction management fee? Will it include hard costs or soft costs? Or some combination of the two?
- What will be considered a Tenant Delay? Must the tenant be given proper notice before the delay can be counted?
- Is there any security around the obligation for the tenant to pay for improvements?
- Will a warranty for the tenant improvements be supplied by the landlord? How long does it last?
Build-out controlled by tenant
- Will correct plans for the building prior to improvements be provided by the landlord?
- Have the proposed general contractor and architect been authorized by the landlord?
- Has the base building core been accurately described? No base building costs should be treated as improvement costs.
- Is there a tenant improvement allowance? How and when will it be paid?
- What can the tenant improvement allowance be used for?
- Will the tenant be able to meet the target completion dates set by the landlord?
- Can the commencement date be altered if the landlord causes delays?
At Golden Group Real Estate, we specialize in tenant representation real estate services for office space users in the Chicago area, helping local business owners find office space and negotiate lease and purchase agreements. We never represent landlords, so we are prepared to negotiate aggressively on behalf of our tenant clients.
For more on Golden Group Real Estate, read about our real estate services. Let us know if we can help you find office space for rent or buildings for sale. Call us at (630) 805-2463, email us at email@example.com