Construction Costs hidden in your Commercial Lease

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Are you looking at constructing new space? An extremely important thing to understand when looking at Commercial Space is what OTHER expenses will you be responsible for. The RENT is obvious, but are there any additional fees the Landlord will impose during specific situations? One area of the lease where we often find additional charges is the details concerning the construction in the space.  After budgeting for a project, the last thing a small business needs is additional expenses they hadn’t planned for popping up! We help Tenants by identifying these charges in the lease so they are prepared and never surprised. In some cases we are even able to negotiate these charges be waived, or reduced.

  • It is not unusual for the Landlord to impose a “Review Fee” in relation to approving the Tenant’s design. This could range anywhere from $200 – $1,000 per review.  It is important to understand exactly what the Landlord will and won’t approve, so you don’t find yourself submitting, and re-submitting plans and being charged again and again.
  • In some instances if the Tenant is using a pre-approved contractor of the Landlord, these fees could be waived or reduced because the Landlord has confidence said contractors are familiar with their requirements.
  • Hoarding (the boards that are erected to keep the construction debris from impacting other premises, and keep the public out of the construction zones) is another expense that is usually imposed on the Tenant. Some AAA Class locations might even impose graphics are affixed to the hoarding, which is another potential cost to consider.
  • If part of the Tenants Work requires access to the roof, or to the base building structure, the Landlord will often impose an hourly rate or set fee to have this work supervised.  It is crucial this work is not delayed or postponed if the Landlord has already scheduled a supervisor as it could result in charges for cancellation.
  • Although Rent is not due during the Fixturing (Construction) period the Landlord might impose a fee for the utilities or insist the utilities be transferred into the name of the Tenant prior to commencement of construction.

 Having a team familiar with Commercial leases will be the key to helping you identify costs you could be liable for!

Knowledge is Power

** Jensen Consulting is not a law firm and is not in any way providing any form of legal or professional advice and the information provided on this website is for general information purposes only. Your use of, the site does not create a service provider-client relationship and the posts provided in the Site are not intended, nor should be considered, as any form of legal advice. Consulting services provided by Jensen Consulting are not professional advice or an opinion relating to law of any kind. You are advised to seek legal advice by contacting a lawyer in relation to your specific legal issues.

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Katherine Jensen
Katherine has spent over a decade immersed in the world of Real Estate and Corporate legal administration. After graduation in 2006 Katherine took a role in a small law firm, drafting real estate documents from scratch and assisting with estate administration. From there grew to a clerk role in a larger law firm and then transitioned to an in-house role with a commercial developer in Saskatchewan. Working for a development and property management firm gave Katherine experience working with complex corporate structure and drafting intricate lease contracts for a variety of properties and tenancies including both office and retail. Moving back to Ontario, Katherine took a role analyzing leases for major landlords and tenants across Canada, offering solutions to maximize profits in their portfolios. Currently Katherine owns Jensen Consulting, and offers her expertise as a consultant to help landlords and tenants across Canada with drafting and auditing their Commercial Leases.

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