Commercially rented space might have to be customized to fit an occupant's requirements. You and the property owner will need to reach an arrangement about these adjustments and choose:

- who'll come up with the modifications

• who's responsible for finishing or hiring out the modification work
• when the task will get done, and
• who should pay for it.
  stackoverflow.com
  What Is an Occupant Improvement Allowance?
  Negotiating the Payment Method for Your TIA
  Negotiating the Size of Your TIA
  Negotiating Protections for Your TIA
  Negotiating How You Can Use Your TIA
  Alternatives to a TIA: Build-Out and Turnkey
  Talk to an Attorney
  What Is a Tenant Improvement Allowance?
  
  The most common method for property managers and occupants to assign the expense of enhancing commercial space is for the property manager to give you what's understood as a renter enhancement allowance (TIA). The TIA represents the of money that the proprietor is ready to invest in your enhancements. It's specified either as a per-foot quantity or a total dollar sum. Generally, if the enhancements cost more than the agreed-upon sum, you pay the extra.
  
  The lease stipulation that attends to these concerns is generally titled "Improvements and Alterations."
  
  Negotiating the Payment Method for Your TIA
  
  You typically don't get the TIA straight. Instead, the proprietor pays the contractors and providers up to the TIA limit-after that, you pay. Or, the property manager might choose to offer you a month or 2 of "free" rent, which suggests that you must achieve all that you wish to finish with the cash you've "saved" by not needing to pay the rent.
  
  If you have a choice, press for the previous plan. If the landlord gives you the TIA and you foot the bill, you risk that the IRS will think about that earnings, and tax you accordingly. When the landlord physically keeps the cash and pays the bills, you can potentially avoid this outcome.
  
  Negotiating the Size of Your TIA
  
  You'll be in a good position to plan on an appropriate TIA if you currently know what your improvements are most likely to cost. You'll need to rely on your space coordinators or designers for their advice. If the landlord isn't going to provide you a TIA that'll fulfill the spending plan, you might still decide that it deserves your while to fork over some of your own cash to get the appearance and setup you desire.
  
  Because you'll be accountable for any expenditures above the TIA, you'll assume the risk (and expenditure) of building overruns. The danger will increase if the proprietor, rather than you and your contractor, does the building and construction. After all, the landlord has little reward to keep costs within the TIA quantity since the property owner will not spend for any excess. For this reason, it may be more effective for you to recommend another method to deal with improvements (as described later).
  
  Negotiating Protections for Your TIA
  
  One way to manage the eventual cost of your enhancements is to insist in the lease provision that the property owner should look for competitive bids if the property manager does the work. Specify that the property manager ought to request sealed quotes which the bids be opened in your presence. That method, the possibilities that the property manager will select an unnecessarily costly contractor-or one with whom they have a cozy relationship-are minimized.
  
  Besides managing building overruns, you'll wish to restrict the fees that come out of your TIA. Landlords usually charge overhead and "administrative" fees for occupant enhancement work, even if the proprietor does not take charge of the work.
  
  These costs (which might likewise be charged by the proprietor's contractor, if they're involved) will come out of your TIA, which the landlord is just utilizing as a profit source. The more your TIA is depleted by costs, the less you need to spend on the actual work.
  
  During lease negotiations, make sure you discover:
  
  - what these costs are going to be and
• whether they follow the leasing practice in your location.
  
  Consult your broker or other educated service occupants.
  
  Negotiating How You Can Use Your TIA
  
  Don't let your property owner tell you that your TIA is a concession or a gift. Landlords are usually responsible for the expenses of capital improvements (improving the building in a manner that will benefit any future occupant). If the work under your TIA is a capital enhancement, then the property owner must most likely pay for it anyhow.
  
  But even if the work is genuinely specific-in action to your tastes or unusual service requirements-and the proprietor has nevertheless ponied up some cash, the proprietor isn't worse off. You can be sure that property owners peg their rent demands high enough to compensate them a minimum of in part for the TIA they're paying you.
  
  Once you comprehend that the TIA is truly yours (you have actually paid for it, one method or the other), you'll wish to have some freedom when it pertains to spending it. Consider bargaining for the following 2 contracts in the enhancements provision:
  
  You can use the TIA for a large variety of expenditures. Especially if the landlord has secured the right to keep any unused TIA, make certain that you have broad discretion as to how you can spend it. For example, you ought to be able to apply your TIA to architects' and attorneys' costs, allow charges, moving expenses, and even your own time invested protecting zoning variances or authorizations. If you do not utilize the entire TIA, you'll get a setoff versus lease. In the unlikely occasion that the final costs are less than the TIA, the balance should be credited versus your lease. Returning it to the property manager, in essence, deprives you of the benefit of all your tough bargaining over who pays for improvements.
  
  Alternatives to a TIA: Build-Out and Turnkey
  
  While negotiating a tenant-friendly improvements and modifications provision might appear more suitable, do not be too enamored of a TIA. It isn't "free rent" or a present from the property manager, and it's not without its disadvantages. The issue with a TIA is that you, not the landlord, will be accountable for cost overruns. The following 3 alternatives don't run that danger.
  
  Building Standard Allowance, or "Build-Out"
  
  In this plan, the proprietor offers you a specified package of improvements and you spend for anything fancier or additional. This choice puts the danger of overruns on the proprietor unless you alter the agreed-upon improvements. You're most likely to encounter this approach in brand-new structures specifically, where the property owner has a building and construction crew and materials currently on website.
  
  The offer used to you (the "building requirement") might include:
  
  - a certain grade of carpeting or vinyl flooring covering
• a particular kind of drop-ceiling
• a set number of fluorescent lights per square feet of flooring space, and
• a specified variety of feet of drywall partitions with 2 coats of paint.
  
  Basically, it's like a fixed-price meal in a restaurant-if you want anything fancier, you pay the distinction or set up for your own contractors to come in and do the task.
  
  If the landlord's offer matches you, the structure standard could be the simplest and most economical way to go. Its huge benefit is that the proprietor, not you, pays for any cost overruns (unless you've bought additional products). And if the work isn't done on time, there can be no question as to who's accountable (as long as you have actually not obstructed).
  
  If you do not occur to need the entire plan the proprietor is providing, you can likewise work out for a credit for those products you do not utilize. Your proprietor may decline, however, if they have actually currently bought the products.
  
  You Pay a Fixed Rate, the Landlord Pays the Rest
  
  This plan is the opposite of the TIA, where the landlord pays a fixed amount and you pay the balance.
  
  Your property owner isn't likely to be thinking about this technique unless you have strategies that are clear, firm, and exempt to unanticipated expense increases. That method, the property owner can reasonably assess what the enhancements will cost them and the likelihood of expense overruns.
  
  For instance, suppose your plans require the installation of counter tops made from Italian marble. If the stone is in stock in your area, great