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Tenants need to be aware that if the electrical work that needs to be performed will impact a major component of the building, such as the need to have additional electrical capacity brought to a tenant’s space, simply put, it will be the landlord’s choice of contractor and not tenant’s contractor performing that work.
During lease negotiations, tenants should try to get pre-approval of its contractor(s) from the landlord.
A landlord, in order to exert their control over the work being performed in its building, will sometimes have a list of pre-approved contractors for major trades (thereby controlling what work will be performed and by whom in their building).
From a landlord’s perspective, language should be included in the lease that states that landlord, at its sole cost and expense, will perform all maintenance of the air conditioning HVAC system, including but not limited to, all repairs and replacements thereto.
Tenants should readily agree to language in the lease that any violation of the tenant work restrictions by tenant would give landlord the right to injunctive relief and/or the right to terminate the lease.
In a pro-tenant lease provision regarding a tenant improvement allowance, the tenant would perform all of its work and either pay the construction costs out of its own pocket as work is completed and thereafter get reimbursed by the landlord, or receive the entire allowance at the conclusion of the project.
From a landlord’s perspective, most if not all of the tenant improvement allowance should be spent on hard costs such as costs directly related to construction (including labor, materials, equipment, etc.).
With regards to a tenant improvement allowance and determining how much of the allowance the tenant can put towards soft vs. hard costs, computer data equipment and architectural costs would be considered to be “hard costs.”
With regards to a tenant improvement allowance and determining how much of the allowance the tenant can put towards soft vs. hard costs, construction “hard costs” include labor, materials and space fit-out costs.
A tenant improvement disbursement request states that the tenant has the ability to withdraw from the agreement upon request and vacate the premises.
A tenant improvement disbursement request is a request by the tenant for disbursement from the tenant improvement allowance and generally includes, among other things, (i) a statement that the amount requested in disbursement does not exceed the actual tenant improvement allowance amount, and (ii) that all copies of contracts, work, purchase and change orders associated with the disbursement are attached to the request.
It is common for a tenant to ask the landlord’s principals to be personally responsible for the repayment of any financed additional tenant improvement allowance.
Among other responsibilities, an architect administers the construction process while simultaneously being somewhat of an asset to the tenant’s general contractor on the project.
An architect for a commercial project must also have residential real estate experience.
During the hiring process of an architect, tenants should interview multiple architects to see whether they share the same vision, creativity and competence. In addition, tenants have to gauge if they will be able to work with the architect on a personal level (and whether the price range of the architect is something that the tenant can afford).
It would not be unreasonable when interviewing an architect to ask what (i) projects they have worked on, (ii) the type of errors and omissions liability policy they have, and (iii) the fee and payment schedule.
At the bare minimum, any architectural contract tenant enters into must establish the financial parameters of the project and include the time parameters as they relate to the schematic design, design development, construction document preparation, assistance in the bidding process and contract administration.
The standard agreement form B101 or B141 drafted by the American Institute of Architects provides necessary protection for the client hiring the architect, but not for the architect.
From the perspective of the party hiring the architect, the architectural contract should contain termination provisions for “cause” and “without cause.”
If a tenant is hiring its architect to also help in the purchase of certain furniture, fabrics, materials and other items of that nature for the tenant’s space, it is imperative that you request that any and all discounts that the architect is entitled to be passed along to you.