Leasehold Improvements

            You are the owner of a small commercial building. This building is nothing more than a shell when you enter into an agreement with Mr. and MRs XYZ for three years and the condition that the XYZs make all needed tenant improvements to the property. They are to do the landscaping, and all interior improvements, walls, electrical and lighting, plumbing, flooring and ceilings as well as heating and air conditioning.

This agreement also states your property is to be delivered at the expiration of their lease “in the condition the tenants received it in minus normal wear and usage. There is nothing in the lease which states that the improvements are to remain with the property or that the property is to be restored to its pre- agreement condition upon the expiration of the lease.

When the lease expires you enter your property and discover that the tenants have stripped the property of all their improvements. The building has been returned to you in the same condition it was in when you entered the agreement with the XYZs. That is except for the minor changes due to normal wear and tear.

Have you suffered a loss which you may recover loss funds for?

YES.

Improvement made by a tenant which are permanently affixed to your property (real estate) become a part of the real estate because they have been attached.

This is true unless the agreement explicitly requires that the tenant improvements be removed and (not or) and the property be restored to its original condition.

Landlord Rights to the Improvement added to the property or paid for by tenant depend on two main factors:

• Are the improvements permanent (built in) or freestanding (temporary).
• The agreement demands that the tenant remove all improvements and restore the premises to its original condition.

Note: Images on this blog site are from a free source or taken by the author. No image or group of photos is intended to represent the people the author serves. The author does not care about Race (that is a politically correct term that he does not like because we are all of the same Race, the Human Race. He prefers the term ethnicity, color, religion, sex, gender, marital status, disability, genetic information, national origin, source of income, Veteran or military status, ancestry, citizenship, primary language or immigration status.) He is a service provider for all people. We will all rise together when we band together and help one another. Joseph Erwin is a Real Estate Broker, DRE # O2131799, and a CA general contractor # B 696662. He’s a member of the CRMLS and The East Valley Association of Realtors located in the Inland Empire region of Southern California.