Who is responsible for leased space upkeep in this situation?

Question

Good afternoon everyone!

So, I know that in most tenant/landlord situations, most of the maintenance of the general premises is the responsibility of the landlord to maintain, since they are usually the ones that own the space and likely paid for most of the improvements for the tenant.

What if a tenant pays for the improvement of the space from "warm dark" shell up to their finish.  They of course own the improvements for depreciation purposes for the duration of their lease.  But if we have issues arise with maintenance, i.e. dropped ceiling issues, I don't even know....normal stuff.  Then would they be responsible for the upkeep of that?

I appreciate it!

Dave

Bob Langworthy · Answer

@Kathy Henley is right that anything is possible with a commercial lease. It's usually the case that what the tenant improves, the tenant maintains.

Hope this helps,

Kathy Henley · Answer

Look for the answer in the lease @David Hite. The general premises might be the responsibility of the LL if it says so in the lease. Commercial leases may have the LL paying for the build-out of space for a new tenant, with the expenses spread over the term of the lease, or, there may be reimbursement terms, once certain portions of the build-outs are complete.  Such terms are agreed upon by both parties, LL and Tenant.  A well-written commercial leases has very specific maintenance clauses. Will the tenant call the HVAC guy? Who pays? Maybe the property manager schedules the repair appointment, pays the contractor, and bills the tenant for the repair?  Such terms must be described in the lease; nothing is 'normal stuff'. This is why commercial leases are often negotiated with leasing agents and why Lease Agreements look bloated. During the life of a lease, such details are very important to the cash flow of the Tenant and the LL.