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Work Letters And Construction Allowances In Lease Agreements

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LA 281 Office Lease Work Letter For Tenant Improvements With Landlord Construction Allowance

This work letter is designed for use with an office lease. It pertains only to non-base building improvements for the tenant. The landlord will execute a guaranteed maximum price contract for the construction of these improvements, and the tenant will receive a construction allowance which will pay for a portion of their cost.

The tenant can elect to increase the amount of the construction allowance, and repay the increased amount (with interest at 10%) over the initial term of the lease as additional rent.

Number of Single Spaced Pages: 6

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LA 1321 The Pro-Tenant Work Letter Addendum

The following document contains several pro-tenant provisions relating to the construction of tenant improvements. The addendum is designed to be attached either to the lease or the work letter, and it contains the following pro-tenant provisions:

  • a punchlist clause that allows the tenant to withhold twenty-five percent of the first month's minimum rent as security for the completion of punchlist items, and which requires that such items be completed within thirty days following substantial completion;
  • a pro-tenant delivery clause which protects the tenant in case the premises are not completed by the landlord as originally contemplated by the parties at the signing of the lease;
  • a definition of “substantial completion” of the landlord's work which requires the issuance of a temporary or permanent certificate of occupancy;
  • a “substitutions and credits” clause which gives the tenant credit for building standard work items which are not used in the tenant's plans, assuming the landlord approves the plans;
  • a provision which excludes certain types of costs from the cost of construction paid by the tenant;
  • a clause giving the tenant the right to audit construction costs relating to the premises;
  • a landlord guarantee of all its construction; and
  • a broad indemnity from the landlord in favor of the tenant relating to losses or damages arising from the landlord's construction activities.

Number of Single Spaced Pages: 9

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LA 233 Pro-Landlord Work Letter For New Office Building

This pro-landlord work letter is designed for a lease of a new office building constructed by the landlord. The landlord is obligated to build the shell, and the tenant will construct his own tenant improvements.

The work letter does not provide for a landlord construction allowance for the tenant improvements. The exhibit contains specifications for the landlord shell, and refers to shell plans which are to be attached to the exhibit when complete.

Number of Single Spaced Pages: 13

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LA 229 Pro-Tenant Work Letter For Tenant Leasing Several Floors In A Multi-Tenant Office Building

This pro-tenant work letter is designed for a large tenant taking multiple floors in a multi-tenant office building. The tenant has substantial approval rights over the plans, and rights to substitute materials to contain costs.

The work letter also provides for a construction allowance based upon the size of the premises, as well as a moving allowance for the tenant.

Number of Single Spaced Pages: 14

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