Commercial Leasing Agreements
In 2011 we signed an agreement for a shop for my husband to start a taxidermy business. The building was just the frame. We spent $20,000 on the build out. We assumed when we left, which will be Sept 15th that we will take everything with us or the next person coming in would offer us $ for the work we did. Our lease was up Aug 2016. My question is the owner is telling us we have to leave everything,is that true? There was never an agreement that rent would be lowered or nothing in agreement about build out cost. Can we take everything with us?
Great question. That’s going to be tough if there’s nothing in the agreement about build out costs. Typically, when a commercial space needs improvements, there will be either a “turn-key” or “stated dollar amount” build out. A turn key build out is when the landlord covers the entire cost of the build out. A stated dollar amount build out is when the landlord pledges a fixed dollar amount towards the cost of the buildout.
Turn key build outs are usually done by landlords while stated dollar amount build outs typically are done by the tenants (with the landlord covering some of the cost). In both cases, I believe that the landlord/owner of the building gets to keep the build outs when the tenant leaves. However, this may or may not be the case since you don’t have a prior agreement.
I’d consult with a legal professional before you went any further.
Generally, the same rules apply to commercial real estate that apply to the sale of a residence. If it’s not attached, it’s considered personal property. So, something like displays would be unquestionably your’s. Even items that can be removed and any scars fixed, if you can show they were purchased with your funds, would be yours. A good example would be a sign. You take it down, fix any damage to make it as it was prior to installing the sign, and you would be fine. The idea is to return the space to the way it was when you acquired the lease.
No doubt, this is going to be a good thing to run past your attorney.