Commercial Remodeling · South Florida

Tenant Improvement Construction

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Tenant Improvement Construction

“Tenant improvement” isn’t a building type — it’s a delivery method, and the contract mechanics around it decide who pays, who approves drawings, and who’s actually holding the permit almost as much as the Florida Building Code does. Elbaz runs TI projects across every occupancy type in this package, but what makes tenant improvement its own discipline is the three-way relationship between landlord, tenant, and contractor that governs every decision on the job.

A tenant improvement allowance (TI allowance) is money the landlord commits toward build-out costs as part of the lease deal, and it can be structured as a turnkey build the landlord manages directly, a direct-pay arrangement where the landlord pays contractors as work completes, or a reimbursement model where the tenant pays and submits draws against the allowance. Each structure changes who Elbaz answers to day-to-day, how draws get released, and who carries the risk if costs exceed the allowance.

Florida’s construction lien law also enters the picture more directly on TI work than on most other project types, since both landlord and tenant have a financial stake in the same building — which is why a Notice of Commencement and proper lien waiver documentation matter more here than on a standalone project.

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How TI allowances actually get structured and disbursed.

In a turnkey build, the landlord manages the project and its own contractor, handing the tenant a finished space — the tenant has less control but also less exposure to cost overruns. In a direct-pay model, the landlord pays contractors directly as milestones complete, which keeps the tenant’s cash flow lighter but requires close coordination to keep payments and schedule aligned. In a reimbursement model, the tenant pays the contractor and submits receipts (often formatted as AIA-style G702/G703 pay applications) for reimbursement up to the allowance cap — giving the tenant more control over contractor selection and finishes, but requiring the tenant to front the capital. When actual costs exceed the allowance under any of these structures, that overage becomes the tenant’s direct responsibility unless the lease specifies otherwise.

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The landlord's work letter and rules and regulations.

The lease exhibit known as the work letter defines exactly where base building work ends and tenant improvement work begins — HVAC distribution to the space might be base building, while interior ductwork and diffusers are tenant scope, for example. Landlords also frequently maintain an approved contractor list or at minimum require proof of insurance and executed lien waivers before allowing work to start, and every building has its own set of rules and regulations governing things like freight elevator booking windows, after-hours work restrictions, and where dumpsters and material staging can go.

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Permitting and lien law on a leased space.

Who actually pulls the permit — the contractor of record, the tenant, or occasionally the landlord — depends on lease terms and local jurisdiction practice, and getting this wrong can create liability questions later. Florida’s construction lien law generally requires a Notice of Commencement to be recorded for most projects above a minimal cost threshold, and on TI work specifically, both the landlord’s and tenant’s interests in the same building make clean lien waiver documentation from every subcontractor a standard closeout requirement rather than a nice-to-have.

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Coordinating with base building systems.

New tenant HVAC zones, fire alarm devices, and other life-safety equipment don’t operate as standalone systems — they tie into the base building’s existing infrastructure, and the landlord’s engineer of record typically has to review and approve those tie-ins before the local building department will sign off on the permit. This coordination step is frequently the actual pacing item on a TI schedule, more so than the physical construction itself.

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Materials

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01. Option 1

AIA-style draw/pay application documentation (G702/G703) matched to allowance disbursement structure

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02. Option 2

Landlord-compliant certificates of insurance and executed lien waiver packages for every subcontractor

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03. Option 3

Base-building tie-in materials matched to existing system specifications (fire alarm devices, VAV boxes)

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04. Option 4

Demising wall and storefront/entry assemblies built to the lease exhibit’s specifications

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05. Option 5

Signage and branding elements built within landlord design criteria constraints

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06. Option 6

After-hours logistics equipment (elevator/floor protection, off-hours material staging plans)

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What Drives The Cost

  • TI allowance structure — Turnkey, direct-pay, and reimbursement models carry different overhead and documentation costs.
  • Base-building tie-in requirements — Landlord engineer review fees and building-mandated specialty contractors for fire alarm or life-safety work add cost.
  • Building-specific work rules — Union labor requirements, after-hours premiums, and freight elevator fees vary significantly by property.
  • Scope beyond the work letter — Upgrades the tenant wants beyond the landlord’s base specification are billed outside the allowance.
  • Permitting and lien administration — Notice of Commencement filing and lien waiver tracking add administrative overhead relative to a standalone project.
  • Draw documentation overhead — Reimbursement-model projects require more paperwork and reconciliation than a straightforward fixed-price job.

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Our Process

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01. Work Letter & Allowance Review

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02. Landlord Approval Submittal

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03. Permitting & Notice of Commencement

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04. Construction with Base-Building Coordination

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05. Draw Reconciliation, Landlord Walkthrough & CO

Confirm the lease exhibit’s base building vs. tenant scope split and which allowance disbursement structure applies.

Submit drawings, contractor qualifications, and insurance documentation for landlord/property management approval.

Pull the appropriate permit and record the Notice of Commencement required under Florida’s construction lien law.

Execute the work around building-specific rules — after-hours windows, freight elevator scheduling, utility tie-in approvals.

Reconcile allowance disbursement against actual costs, complete the landlord’s final walkthrough, and close out the certificate of occupancy.

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Recent Commercial Remodeling Work

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Tenant Improvement Construction Questions, Answered

1 What exactly is a TI allowance and who decides how it gets spent?

It's a sum the landlord commits toward your build-out as part of the lease, and how it gets spent depends on the structure your lease specifies — a landlord-managed turnkey build gives the landlord more control, while a reimbursement model gives you more say over contractor selection and finishes within the allowance cap.

2 If my landlord is paying for the build-out, does that mean I don't get to pick my own contractor?

Not necessarily — that depends entirely on which TI structure your lease uses. A turnkey build typically means the landlord's contractor does the work, but reimbursement and tenant-controlled models generally let you choose your own contractor, subject to the landlord's insurance and approval requirements.

3 What happens if my build-out costs more than the allowance my landlord gave me?

In most lease structures, the overage becomes the tenant's direct responsibility — this is exactly why we review the work letter and price against the allowance early in design, so cost overruns are identified before construction starts rather than discovered mid-project.

4 Who actually pulls the permit on a tenant improvement project — me, my contractor, or the landlord?

It depends on your lease terms and the local jurisdiction, but most commonly the contractor of record pulls the permit — we confirm this explicitly at project start since it affects liability and who's accountable for closing out inspections.

5 What's a Notice of Commencement and why does my landlord's property manager keep asking about it?

It's a document required under Florida's construction lien law for most projects, recorded before work starts, that protects both landlord and tenant by establishing a clear record of who's responsible for the project — property managers ask about it because an unrecorded Notice of Commencement can create lien exposure for the building itself.

6 Can my landlord require me to use their approved contractor list?

Many commercial leases do include this requirement, particularly for work touching base building systems like fire alarm or structural elements — it's worth checking your specific lease language, since some allow any licensed, insured contractor while others restrict to a pre-approved list.

7 How does a TI project account for the building's existing fire alarm and HVAC systems?

New devices and zones have to be reviewed and approved by the landlord's engineer of record before tying into the base building's existing systems — this coordination step is built into our process from the start rather than handled as an afterthought once construction is underway.

8 What's the difference between base building work and tenant improvement work on my project?

Base building work is what the landlord provides as part of the shell — typically things like the primary HVAC plant, structural elements, and core utilities — while tenant improvement work is everything built out specifically for your space, and the line between them is defined in your lease's work letter exhibit.

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