Commercial Renovation Checklist Before Signing a Lease
Finding a commercial space that looks right for your business is exciting.
The location works. The square footage seems adequate. The rent fits the budget. Maybe you can already picture the finished office, retail store, restaurant or clinic.
But before signing the lease, there is another important question:
Can the space actually be renovated to meet your needs — and at a cost that makes sense?
Commercial tenant improvements can involve much more than new flooring and paint. Electrical capacity, plumbing locations, mechanical systems, accessibility, permits, landlord requirements and existing building conditions can all affect the final scope and cost.
Reviewing these items before committing to a lease can prevent expensive surprises later.
1. Define What Your Business Actually Needs
Before evaluating the space, create a basic list of what the finished business requires.
Consider:
Number of offices or treatment rooms
Reception area
Staff room
Washrooms
Storage
Customer seating
Meeting rooms
Kitchen or food-preparation areas
Specialized equipment
Electrical requirements
Plumbing requirements
Ventilation
Accessibility
Signage
Security
Loading and deliveries
A space that works well for a professional office may require extensive modifications to become a restaurant, salon, medical clinic or other specialized business.
Start with the operational requirements rather than trying to force the business into the existing layout.
2. Walk the Space With a Contractor Before Signing
One of the most useful steps you can take is having a commercial renovation contractor look at the property before the lease becomes unconditional.
A contractor can help identify obvious construction concerns and discuss what may be involved in converting the space.
The walkthrough can consider:
Existing wall layout
Ceiling heights
Flooring
Washrooms
Electrical service
Plumbing locations
HVAC
Fire separations
Existing finishes
Access for construction
Potential demolition
Overall condition
This is not the same as completing drawings or providing a final construction price.
It is an opportunity to identify potential issues before you become financially committed to the property.
3. Understand What the Landlord Is Providing
Do not assume everything currently visible in the space will remain or that the landlord will complete certain work.
Clarify what condition the property will be delivered in.
For example:
Will existing walls remain?
Will damaged flooring be replaced?
Is the HVAC operating properly?
Are washrooms complete?
Is the electrical service adequate?
Are existing improvements included?
Will the landlord complete any base-building work?
Who is responsible for deficiencies?
These items should be clearly documented rather than relying on verbal discussions.
4. Review the Tenant Improvement Allowance
Some commercial leases include a tenant improvement allowance.
This is money the landlord contributes toward approved improvements to the leased space.
If an allowance is being offered, clarify:
Total allowance
Eligible expenses
Whether permits and design costs qualify
How reimbursement works
When payment is released
Whether invoices are required
Whether unused funds are forfeited
Whether the allowance affects the lease rate
A generous-sounding allowance may cover only a portion of a substantial renovation.
You still need an approximate understanding of the overall project cost.
5. Check Electrical Capacity
Modern businesses can require considerably more electrical capacity than an older commercial unit was originally designed to provide.
Consider the requirements for:
Computers
Kitchen equipment
Medical equipment
HVAC
Lighting
Refrigeration
Machinery
Point-of-sale systems
Specialty equipment
EV charging
Signage
Upgrading electrical service can significantly affect the budget and schedule.
Before signing the lease, identify whether your intended equipment is compatible with the existing electrical system.
6. Look at Plumbing Locations
Plumbing can have a major effect on renovation cost.
If your business requires:
Additional washrooms
Sinks
Kitchen equipment
Dental equipment
Salon fixtures
Laundry
Floor drains
Specialized plumbing
…the location of existing water and drainage lines matters.
Moving plumbing across a commercial unit may involve cutting concrete, accessing neighbouring spaces or coordinating with the building's existing systems.
A unit with plumbing already located near where you need it may be substantially easier to renovate.
7. Understand the HVAC System
Heating, cooling and ventilation should be reviewed before committing to the space.
Questions include:
Is the existing system operational?
Does it serve only your unit or multiple spaces?
Is it large enough for the proposed occupancy?
Will new rooms require additional ductwork?
Does specialized equipment create additional heat?
Are exhaust systems required?
Who is responsible for HVAC maintenance?
Adding several enclosed offices to a previously open space can change how air needs to be distributed.
Restaurants and other specialized businesses can have significantly more complex ventilation requirements.
8. Consider Accessibility
A new business layout may need to account for accessibility requirements.
This can affect:
Entrances
Door widths
Washrooms
Corridors
Changes in floor level
Customer service areas
Parking and exterior access
Existing conditions do not automatically mean the proposed renovated layout will satisfy every current requirement.
Accessibility should be considered early in the design process.
9. Confirm Whether Permits Will Be Required
Many commercial tenant improvements require permits or approvals depending on the work involved.
Potential examples include:
Building permits
Plumbing permits
Electrical permits
Mechanical work
Structural modifications
Fire-related work
Sign permits
Development-related approvals
The exact requirements depend on the property, municipality and scope.
Permit timelines should be considered when deciding when the lease starts and when the business expects to open.
Paying rent for months while waiting for drawings, approvals and construction can quickly become expensive.
10. Ask About Landlord Approval Requirements
Commercial landlords often require renovation plans to be reviewed before work begins.
They may request:
Architectural drawings
Contractor insurance
WorkSafeBC information
Construction schedules
Trade information
Engineering
Product information
Mechanical drawings
Electrical drawings
Security deposits
Some buildings also restrict:
Construction hours
Elevator use
Deliveries
Waste disposal
Noise
Access
Parking
Work in common areas
Understanding these requirements in advance makes planning much easier.
11. Review Fire and Life-Safety Requirements
Changes to a commercial layout can affect fire and life-safety systems.
Examples may include:
Exit routes
Exit signage
Emergency lighting
Fire separations
Sprinkler locations
Fire alarm devices
Occupant loads
Moving walls or changing how a space is used can require existing systems to be modified.
These items should be identified during planning rather than discovered near the end of construction.
12. Examine Existing Conditions Carefully
A previously occupied commercial space may look finished but still require substantial work.
Look for:
Damaged flooring
Ceiling damage
Poor drywall repairs
Water staining
Outdated lighting
Worn washrooms
Damaged millwork
Old wiring
HVAC problems
Previous tenant modifications
A low lease rate can become less attractive if the space requires extensive remedial work before your own improvements even begin.
13. Confirm Signage Rights
Visibility may be one of the reasons you chose the location.
Before signing, confirm what signage is actually permitted.
Ask about:
Building signage
Fascia signs
Pylon signs
Window graphics
Directory signs
Illuminated signage
Installation requirements
Landlord approval
Do not assume that because another tenant has a large sign, your lease automatically provides the same rights.
14. Think About Construction Access
Commercial renovations require materials, trades and waste removal.
Consider:
Where materials can be delivered
Where contractors can park
Elevator access
Loading areas
Waste bins
Construction entrances
Storage
Building security
Work-hour restrictions
Renovating an empty ground-floor unit with rear access is very different from renovating an occupied upper-floor space in a busy commercial building.
Access conditions can affect both cost and schedule.
15. Establish a Realistic Renovation Budget
Before signing a long-term lease, develop at least a preliminary construction budget.
Include more than visible finishes.
The project budget may need to account for:
Design
Drawings
Engineering
Permits
Demolition
Framing
Electrical
Plumbing
HVAC
Drywall
Ceilings
Flooring
Painting
Millwork
Doors and hardware
Washrooms
Fixtures
Signage
Cleaning
Contingency
Commercial renovations can vary significantly depending on the type of business and existing conditions.
A preliminary contractor review can help determine whether your expectations are reasonably aligned with the available budget.
16. Build Enough Time Into the Lease
Construction itself is only part of the timeline.
Before work begins, you may need time for:
Preliminary planning
Measurements
Design
Pricing
Landlord approval
Engineering
Permit review
Material ordering
Construction
Inspections
Final setup
If your business must open by a specific date, work backward from that deadline.
Discussing possession dates, fixturing periods or rent-free construction periods with your leasing professional and landlord before signing may be worthwhile.
17. Keep a Contingency
Commercial renovations can uncover hidden conditions after demolition.
A contingency helps address legitimate unforeseen work without immediately putting the project under financial pressure.
Possible surprises include:
Hidden plumbing
Damaged framing
Electrical deficiencies
Water damage
Previous unapproved modifications
Mechanical issues
The appropriate contingency will depend on the building and scope.
18. Make the Lease Conditional Where Appropriate
Before signing an unconditional agreement, discuss your requirements with your lawyer, commercial realtor or leasing professional.
Depending on the situation, it may be appropriate to investigate conditions relating to matters such as:
Financing
Permitted use
Landlord approval
Construction feasibility
Municipal requirements
A contractor can provide construction information, but your lease and legal obligations should be reviewed by the appropriate legal and real-estate professionals.
The Cheapest Space Is Not Always the Cheapest Project
A unit offering lower rent may require considerably more construction.
Meanwhile, a slightly more expensive space may already have:
Suitable washrooms
Adequate electrical service
Finished ceilings
Appropriate HVAC
Existing offices
Useful plumbing locations
Better accessibility
The correct comparison is not simply rent versus rent.
Consider the combined cost of the lease, renovation and ongoing operation.
Commercial Renovations in Kelowna and the Okanagan
Turneround Construction provides commercial renovations and tenant improvements throughout Kelowna, West Kelowna and the surrounding Okanagan Valley.
We work with businesses, landlords and property managers on offices, retail spaces, restaurants, medical and dental spaces, industrial properties and other commercial interiors.
If you're considering leasing a commercial property, having the space reviewed before committing can help you better understand the potential construction scope and budget.
778-444-8871
turneroundconstruction.ca
Frequently Asked Questions
Should I get a renovation estimate before signing a commercial lease?
Whenever practical, obtaining at least a preliminary understanding of construction costs can help determine whether the space is financially suitable for your business.
Who pays for commercial tenant improvements?
That depends on the lease. The tenant may pay for the work, the landlord may contribute through a tenant improvement allowance, or the costs may be shared.
How long does a commercial renovation take?
Timelines vary depending on the scope, design, permits, landlord approvals, material lead times and building conditions.
Can I start construction as soon as I take possession?
Not necessarily. Landlord approval, permits, drawings, insurance requirements and other conditions may need to be completed first.
Can a contractor review a space before I lease it?
Yes. A pre-lease contractor walkthrough can help identify obvious construction considerations and provide useful information before you commit to the property.