Any time a tenant wishes to change something about the commercial space that they are renting from you, there are certain risks involved. You want to make sure that the tenant only makes changes that will improve, rather than harm, your investment in the building, and you also want to make sure that they are careful about how they implement those changes so as to prevent damage to your space.

However, another risk involved in tenant improvement is the possibility of legal disputes. Because you and your tenant signed a lease or a binding contract to rent the space, there are often provisions in the lease that control when and how a tenant may improve the property. If the tenant violates one of these provisions, you may have to pursue legal remedies against the tenant.

How to Handle Legal Problems with Tenant Improvements

• First, be sure to read your lease carefully. Make sure you understand exactly what the lease says about when and how a tenant can go about making improvements on the property that they are renting from you. If the tenant has already begun to make improvements, find out when they began and what they plan to do. Some leases do not permit tenants to make improvements without asking your permission first.
• Second, understand that if the tenant has violated the lease in any way by making improvements that are not provided for in the lease, you have a legal right to stop them from continuing and to have your property restored to its original state. This is when you need to contact your lawyer right away so that your lawyer can help you determine what the best course of action will be.
• Third, communicate with the tenant that you intend to take legal action against them if they do not stop making illegal improvements and restore the building to its original state. Sometimes, by talking to the tenant directly, you can avoid having to take legal action through the court system and save yourself a lot of time and money.

When drafting a lease with a new tenant, there are ways you can protect your property from unwanted improvements. You and your lawyer should draft the lease so that it requires a tenant to ask permission before beginning improvements so that you can determine whether the improvement is in the best interest of the property. You can also specify that any trade fixtures — or additions to the property required for the tenant to conduct his or her business — must be paid for by the tenant and removed when the lease ends. The lease should also specify that if the tenant engages in improvements, the tenant is liable for any issues, such as worker injuries, that occur during the improvement process.

Carefully drafting a lease is the best way to prevent unwanted improvements by tenants. Talk to your lawyer before drafting the lease or if you need to take legal action against a tenant.

Relevant Resources:

• How to attract quality tenant to your commercial property
• How to keep tenants happy during building renovation