0 of 30 Questions completed
You have already completed the assessment before. Hence you can not start it again.
Assessment is loading…
You must sign in or sign up to start the assessment.
You must first complete the following:
0 of 30 Questions answered correctly
Time has elapsed
You have reached 0 of 0 point(s), (0)
Earned Point(s): 0 of 0, (0)
0 Essay(s) Pending (Possible Point(s): 0)
When seeking an architect, it is often in the tenant’s best interest to create a request for proposal (“RFP”). Among other things, the RFP will detail the scope of the architect’s work required and outline the project’s administrative environment during the construction process.
When a tenant is searching for an architect in the preliminary stage of construction, a tenant’s request for proposal (“RFP”) constitutes a binding agreement upon consent by the architect (thereby, legally binding the architect to finish the job).
Without exception, all leases must contain language stating that any work that is to be performed in a tenant’s space must be subject to landlord’s consent.
There is no situation where a tenant should seek pre-approval of its construction plans by its landlord before lease execution because in all cases, lease execution is a condition precedent to the landlord’s approval.
Whether or not it is financially feasible, it is not in the tenant’s best interest to hire an architect to design construction plans for a space before lease execution.
A tenant should request pre-approval from its landlord for all decorative alterations, which do not impact the building’s system and are non-structural in nature.
If a tenant’s alteration is non-structural, a landlord will not require a tenant’s contractor to submit a certificate of insurance. A landlord will only demand a contractor’s certificate of insurance for structural alterations.
Landlord advocates should provide language in the lease that states that “Landlord’s approval of tenant’s work plans indicates that in the landlord’s judgment, all plans submitted by the tenant are in fact in accordance with applicable governmental or quasi-governmental laws, codes, rules and/or regulations.”
Tenants should request a cap on reimbursements to the landlord for its review of tenant’s construction documents.
If a landlord is providing the tenant a “landlord contribution” or “tenant improvement allowance” in order for the tenant to perform its work, there should be a specific time period – somewhere between six (6) to nine (9) months – that the tenant must use those monies or, otherwise, they will lose the right to reimbursement from the landlord for same. Conversely, if confronted with such a request by the landlord, tenants should try to insert language to the effect that if they don’t use the money within that time period, the landlord will credit back those monies to tenant as additional free rent under the lease.
As to specialty alterations, if you are a landlord, it would be beneficial to make it an express condition of the lease that any specialty alterations need to be removed by the tenant at lease expiration or earlier termination of the lease.
As the tenant, the landlord should make you aware of whether your improvements are specialty alterations or just simple alterations at the time they grant their consent to the actual plans, so that you will know in advance of performing the construction if the alteration will need to be removed by you at lease expiration or earlier termination of the lease.
Tenants should accept if the lease requires them to pay for damage caused by tenant’s removal of tenant’s trade fixtures, materials and equipment, including for wear and tear.
Generally, the tenant has the power to remove the labor employed by the landlord in the building if the labor employed by tenant to perform work is incompatible with landlord’s labor at the building.
The tenant must be aware of whether or not the building is a union or non-union building because the union labor at the building will have the power to remove the tenant from their space.
The cost of performing work with union workers adds a fairly significant amount to the cost of a tenant’s build-out.
If you are a tenant and the landlord is also going to be performing work to the space, having the right of early access is essential. Tenants should negotiate language to the effect that, somewhere between ten (10) and twenty (20) business days prior to landlord’s substantial completion of its work, tenant shall have the right to access the premises early for the purpose of installing its telecom and data wiring contemporaneously with the landlords installation of any of its own work.
As a landlord, it is imperative to include language in the lease that any and all work by the tenant must comply with any reasonable work schedule and rules and regulations proposed by you.
In the event of a sizable build-out of a space by a tenant, it would not be unreasonable for a landlord to ask the tenant to provide financial proof of their ability to complete the construction.
In the event of a sizable build-out by tenant, it is common practice for a landlord to have legal access to the tenant’s bank account to ensure that the construction is completed.
Landlord advocates should consider instructing tenants to maintain segregated bank accounts for sizable build-outs and earmark their funds for that particular purpose.
A performance bond taken out by the tenant is given to the landlord so that the landlord can raise debt to ensure that the contractor will be paid.
A performance bond is often required of a tenant to ensure that the work commenced will, in fact, be completed.
A tenant would prefer the amount of insurance required of its contractor by the landlord to be closer to $1 million, as opposed to $3 million.
Landlords typically bond, discharge or pay off liens placed against the premises as a result of tenant’s work.
Landlords should require that in connection with any tenant work that be performed at a cost in excess of $25,000 to $50,000, that copies of any and all financial records of work for that project are given to building ownership.
A DCP-36 document is a statement by the landlord ensuring that the premises leased to a tenant is asbestos free.
If a tenant’s build-out requires demolition work to be done, then the tenant should request an ACP-5 and add language that the ACP-5 must state that there is no asbestos-containing material within the premises.
Tenants should secure a representation that on the lease commencement date that any floors, ceiling, insulation, fireproofing and columns do not contain asbestos or any other hazardous material. Taking it a step further, tenants should request that if any asbestos containing material (“ACM”) is discovered in the performance of tenant’s work (the removal of which is required by law), then the landlord must be obligated to remove or reimburse tenant for its removal.
Tenants should request free freight elevator time during the performance of its work to prepare the premises (in addition to requesting additional free freight elevator time during tenant’s initial move in to the premises).