A. Landlord’s View: The landlord wants the right to wait until the lease’s end to decide whether the tenant must restore the space to its original condition (except for reasonable wear and tear) or can let some or all of the tenant’s alterations stay in place.
The landlord will argue that this will give it enough time to properly evaluate whether an alteration will increase the space’s value and help the landlord get a higher rent. If the landlord deecides that the alteration will not enhance the space’s value, they can make the tenant remove the alterations, or, at least pay for their removal.
Tenant’s View: Tenant should not let the owner wait until the lease’s end to decide about removal of alterations. The cost of removing certain alterations may be prohibitive. For example, suppose you install an interior staircase in a multi-floor space.
The expense could be enormous, if, at the lease’s end, the tenant must demolish the staircase and close the ceiling penetrations between the floors. The tenant will not want to find out at the eleventh hour that they responsible for a large expense like this. Instead, the tenant will want to know when they sign their lease whether they will be responsible for removing any alterations they make during the lease.
Compromise: Landlord makes decision when consenting to alterations. The landlord is likely to balk at being forced to blindly decide about alterations removal when the tenant signs a lease, as it may not know what types of alterations the tenant will end up making in the space.
Therefore, as a compromise, when the tenant and the landlord agree in the lease that the tenant will decide whether they remove a particular alterations when the landlord gives its consent to that alteration.
Also, if the landlord asks, give them the option of doing the removal and restoration work themselves, at the tenant’s expense. The landlord may want this option becuase it may think that, since the tenant will be moving out shortly, they will have no incentive to do a good restoration job.
This compromise will give the tenant a clear idea of the alternation’s full cost, as the tenant will know whether they must also include its removal costs. That lets the tenant decide whether making the alterationa will work for them financially.
And the compromise let’s the landlord make a decision about the alterations without running blind, that is, it will know exactly what type of alteration the tenant will mkae before it decides whether to require its removal. The compromise also gives the landlord the option of doing the work itself at the tenant’s expense.
