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Tenant Improvements (TIs)
Practical Law Glossary Item 1-503-1091 (Approx. 3 pages)
Glossary
Tenant Improvements (TIs)
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.