Can I Modify My Space in a Commercial Lease?

Commercial leases are a complicated business for most landlords and investors. Much of it is legal talk and almost always requires help from a lawyer, in addition to the help you get from your commercial real estate agent. 

A lot goes into a regular commercial agreement, and there is much you need to understand before we can answer the question. By the end, you will know whether or not you can modify the space you have per your commercial lease, and who will be responsible for the modification.

Using a Commercial Lease Amendment 

Naturally, if any party contained in the lease were to modify the space listed in the contract, they need to change the very agreement. Doing this is possible with the use of an amendment. If both the landlord and the tenant agree, a single paragraph or a whole section could be changed in the agreement. The change is made to allow for modification or other improvements that were not previously mentioned in the lease.

This change is called a commercial lease amendment, and it is not to be confused with a commercial lease addendum. An addendum is a separate document that goes together with the lease once it’s signed. 

If you decide to go this road, proper negotiation between the owners and renters must take place. 

What Does an Amendment Change and What Does It Allow?

Several things can be achieved with a commercial lease amendment:

• The terms of the lease can be extended

• An adjacent space can be included in the lease and occupied by the tenant

• Modifications and improvements to the space from the lease can be made

The last part is of interest to us. In addition to modifications and improvements, an amendment can allow for the space to be increased or decreased in size. All of these things are very important for commercial leases because the business occupying the space leased can grow or struggle through time. That makes changes to the actual physical space necessary.

Many of these changes are often allowed by the initial lease as tenants may want to make changes to the building from the very start. The changes are outlined in the lease, and the tenant makes the changes upon signing the contract. 

However, as we’ve already mentioned, changes might be required over time – most of which are rarely planned in advance. For the desired modifications and improvements to take place, both parties need to agree and change the lease appropriately. What’s more, the amendment should also clearly state who is responsible for these changes. In most cases, it is the tenant, but sometimes it could be the landlord as well. 

Key Takeaway

All in all, almost any kind of modification or improvement to the space from the lease is possible. As long as both parties can agree, they can make it work. They only need to make sure the lease acknowledges their deal to the letter so that no future disputes will occur.

For more information, you may reach us at info@cbicommercial.com.