Failing economic conditions may put the tenant in the driver’s seat when negotiating their leases, especially when it comes to their rights to make alterations as much as they like to. Although owners want tenants to get their permission to make alterations to a premises, most tenants find the owners’ initially proposed restrictions too rigid.

Because owners generally believe they need the final and subjective say over tenant alterations to ensure that such changes won’t adversely affect building systems and structural elements, they can offer tenants some alteration rights without losing complete control of taking major chances.

Here are some ways that owners can modify tenant’s proposals:

• Owners can safety permit tenants to perform certain cosmetic, nonstructural changes. Cosmetic changes, which should be specifically delineated in the lease, can be defined as alterations that do nothing more than change the interior face of the premises, for example, painting and carpeting.
• Owners can allow tenants to make nonstructural changes that have a dollar cap, which would prevent a tenant from making wholesale changes to the premises. The dollar cap should be based on the size of the space across a 12-month period, rather than a per-alteration amount.

However, if the alteration is structural or involves a change to the building’s systems or components, the owner should retain the right to give his consent at his sole and absolute discretion.

PRACTICAL POINTER: The lease should also require the tenant to use only owner-approved contractors when making alterations to the premises, and to comply with all governmental laws, as well as the rules and regulations of the owner. In addition, the tenant should comply with the plans and specifications approved by the owner.