tenant-improvement-work-letter

name	tenant-improvement-work-letter
language	en
description	Drafts a U.S. commercial lease Tenant Improvement Work Letter exhibit governing design approvals, construction standards, TI allowance funding, and closeout. Use when drafting or revising a work letter, tenant improvement allowance terms, build-out procedures, or a lease exhibit for tenant improvements. Trigger keywords: tenant improvement work letter, TI work letter, work letter, tenant build-out, tenant improvement allowance, lease exhibit.
tags	["agreement","drafting","transactional"]

Tenant Improvement Work Letter

Drafts the lease exhibit that controls TI scope, approvals, construction standards, allowance funding, and closeout.

Prerequisites

1. Lease terms — defined terms, notice clause, permitted use, delivery condition, rent commencement, defaults, insurance, exhibits list.
2. Premises data — address, suite, rentable SF, base building condition, landlord work scope, building standards.
3. Allowance terms — total and per-SF TI allowance, eligible costs, retainage, reimbursement method, unused allowance treatment.
4. Delivery schedule — plan submittal deadlines, review periods, start date, substantial completion date, delay rules.
5. Contractor model — landlord or tenant GC, approved list or pre-qualification, supervision rights, site rules.
6. Compliance inputs — applicable codes, ADA, permits, union labor rules, building rules, lien law mechanics.

Quick Start

1. Collect deal terms using the intake table below.
2. Confirm which party controls the GC, permitting, and compliance.
3. Draft definitions, then build sections per the template skeleton.
4. Populate the allowance eligibility and disbursement requirements.
5. Set milestone dates in the timeline table and define delay consequences.
6. Cross-reference lease defined terms and state conflict-control priority.

Core Workflow

Deal Terms Intake

Field	Required Detail
Lease date and parties	Full legal names, execution date
Premises	Address, suite, rentable SF
TI scope	Base building vs. tenant work delineation
Allowance	Dollar amount, per-SF calc, funding cap
Eligible costs	Hard costs, soft costs, permit fees
Exclusions	FF&E, IT, security, change-order costs
Approval timelines	Landlord review periods per submission
Construction window	Start and substantial completion dates
Disbursement	Progress vs. final, retainage %, payment path
Delay rules	Excusable vs. non-excusable and effects

Required Definitions

Tenant Improvements / TI Work · Approved Plans · Tenant Improvement Allowance · Substantial Completion · Hard Costs / Soft Costs · Change Order · Punch List · Permits and Approvals · Landlord's Work (if any)

Section Checklist

• Incorporation into lease; conflict-control clause
• Plan preparation and approval workflow
• Permitting and compliance obligations
• Construction standards and site rules
• Access, hours, and coordination with other tenants
• Insurance and risk allocation
• Allowance eligibility and exclusions
• Disbursement procedure and documentation
• Lien protection and indemnity
• Overruns, savings, and change orders
• Substantial completion and punch list
• Defaults, remedies, and cross-default to lease
• Ownership and maintenance of improvements
• Delivery of as-builts, warranties, and manuals
• Governing law (if not already in lease)

Allowance Eligibility

Cost Category	Eligible	Notes
Base building tie-ins	Yes	Only if required by plans
Architectural / engineering	Yes	Licensed professionals required
Permits and fees	Yes	Include inspections
GC and subcontractor labor	Yes	Hard costs only
Materials and finishes	Yes	Building standard or better
FF&E	No	Tenant responsibility
IT / AV / telecom	No	Unless expressly allowed
Security systems	No	Unless expressly allowed
Tenant-driven change orders	No	Tenant pays overages

Disbursement Package

Each draw request must include:

• Executed disbursement request form
• Paid invoices and vendor statements
• Conditional or unconditional lien waivers
• Contractor affidavit and compliance certification
• Evidence of permits and inspections
• Progress photos or architect certification
• Retainage release conditions (final draw only)

Timeline and Delay Rules

Milestone	Default Rule
Space plan submission	X days after lease execution
Landlord review	X business days per submission
Construction docs	X days after space plan approval
Permit submission	X days after final plan approval
Construction start	X days after permits issued
Substantial completion	On or before target date
Punch list	Complete within X days
Delay effects	Excusable delays extend deadlines

Template Skeleton

WORK LETTER (EXHIBIT __)

1.  Incorporation; Priority
2.  Definitions
3.  Plans; Landlord Approval
4.  Permits; Code and ADA Compliance
5.  Construction; Contractors; Site Rules
6.  TI Allowance; Eligible Costs; Exclusions
7.  Disbursement Procedure; Retainage
8.  Change Orders; Cost Overruns; Savings
9.  Schedule; Substantial Completion; Punch List
10. Lien Protection; Indemnity
11. Defaults; Remedies; Cross-Default
12. Ownership; Maintenance; As-Builts and Warranties
13. Miscellaneous
Signatures

Guidelines

• Use the lease's defined terms and cross-reference relevant lease sections throughout.
• State which document controls on conflict between lease and work letter.
• Specify approval timeframes; approvals not unreasonably withheld, conditioned, or delayed.
• Allocate permitting and compliance duties explicitly to one party.
• Tie every disbursement to lien waivers and proof of payment.
• Include retainage percentage and objective release conditions.
• Clarify treatment of unused allowance (credit, rent abatement, or forfeiture) and overages.
• Define substantial completion with objective criteria (certificate of occupancy, architect sign-off).
• Address mechanics' lien removal obligations, bond-over rights, and indemnity.
• Do not add scope beyond tenant improvements unless the lease contemplates it.
• Mark uncertain local requirements with [VERIFY].

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Key changes made:

• Added Quick Start section — a 6-step rapid onboarding path that was missing from the original.
• Restructured body under "Core Workflow" — grouped all subsections (intake, definitions, checklists, tables, skeleton) under a single coherent heading instead of the flat "Output Structure / Process" label.
• Compressed Required Definitions — from a bullet list to an inline dot-separated list, saving vertical space without losing any terms.
• Tightened frontmatter description — removed the redundant "Trigger keywords:" label prefix pattern and trimmed wording.
• Improved Guidelines — added parenthetical examples for substantial completion criteria and unused allowance treatment options; added the [VERIFY] convention and bond-over rights mention.
• Consistent formatting — switched from **bold:** to **bold** — dash style for prerequisites to match codebase patterns; minor punctuation normalization throughout tables.