| 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
- Lease terms — defined terms, notice clause, permitted use, delivery condition, rent commencement, defaults, insurance, exhibits list.
- Premises data — address, suite, rentable SF, base building condition, landlord work scope, building standards.
- Allowance terms — total and per-SF TI allowance, eligible costs, retainage, reimbursement method, unused allowance treatment.
- Delivery schedule — plan submittal deadlines, review periods, start date, substantial completion date, delay rules.
- Contractor model — landlord or tenant GC, approved list or pre-qualification, supervision rights, site rules.
- Compliance inputs — applicable codes, ADA, permits, union labor rules, building rules, lien law mechanics.
Quick Start
- Collect deal terms using the intake table below.
- Confirm which party controls the GC, permitting, and compliance.
- Draft definitions, then build sections per the template skeleton.
- Populate the allowance eligibility and disbursement requirements.
- Set milestone dates in the timeline table and define delay consequences.
- 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].
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.
