Leasehold Improvement

A Leasehold Improvement is a modification or enhancement an occupant installs within a leased space to tailor functionality or aesthetics—like custom fixtures, partitions, or specialized electrical setups. While such improvements can elevate occupant utility, ownership often reverts to the property owner once the lease ends, unless negotiated otherwise.

Key Points:

• Occupant-Funded: Tenants may pay for the modifications, either fully or via allowances from the owner.
• Agreement Specifics: Contracts define who retains improvements or how dismantling occurs.
• Added Value: Upgrades may enhance occupant satisfaction or resale potential if left intact.
• Depreciation: Accounting rules let businesses amortize improvement costs over the lease period.

Wise occupant-owner discussions ensure each improvement aligns with building rules, fosters occupant utility, and clarifies ultimate ownership of the altered fixtures.