TIs

tenant improvements (TIs)

USA

In a leasing context, the alterations performed in the leased premises for the specific needs of the tenant. TIs may be new improvements in connection with an initial build-out or remodeling. TIs are negotiated in the terms of the lease (or lease amendment) and can include:

•New flooring or carpeting.

•Installation or demolition of interior walls or partitions.

•New bathrooms.

•Construction of new meeting facilities.

•Installation of interior staircases.

The allocation of construction costs associated with TIs are also negotiated by the landlord and tenant. For example:

• Either party can pay for all of the TI costs.

• Either party can be responsible for the TI costs up to a specified dollar amount and the other party is then responsible for the remaining balance.

• The TI costs can be allocated between the parties where each party agrees to pay for a certain percentage of the overall TI costs.