Short answer
Before you sign, confirm exactly what the landlord delivers and what you pay for, check that the building's HVAC, electrical, plumbing and fire protection can support your use, and get the allowance, fixturing period and approval rules in writing. Walk the space with a contractor — the expensive surprises are usually in the building services.
1. Landlord's work vs. tenant's work
- Get a written schedule (often called the work letter) of what the landlord delivers — and in what condition.
- Is the space delivered as base-building shell, or "as is" with the last tenant's fit-out?
- Who pays to demolish the previous fit-out?
- Who pays to bring washrooms, exits and accessibility up to current requirements?
2. Building services
- HVAC — capacity and age of the units serving the space, and who replaces them when they fail.
- Electrical — the size of the service to the unit, and whether your equipment fits on it.
- Plumbing — sanitary and water capacity, especially for restaurants, clinics and grocery. Restaurants also need to confirm grease interceptor and gas requirements.
- Fire protection — sprinkler coverage and the fire alarm, and whether your layout needs them modified.
- Structure — floor loads for heavy equipment, racking or safes, and any roof penetrations you'll need.
Ask for base-building drawings and the age of the rooftop units. Upgrading services is where fit-out budgets get surprised.
3. Approvals and rules
- Is your use permitted under the property's zoning?
- Landlord design criteria, drawing approval process and turnaround time.
- Landlord-required contractors or trades for roof, fire and base-building systems.
- Rules on working hours, noise, deliveries and after-hours access.
- For older buildings: has a designated substances or asbestos survey been done? Ontario requires asbestos to be identified before renovation or demolition work that may disturb it.
4. The money terms
- Tenant improvement allowance — how much, and when it is paid. Many allowances pay only after completion and paperwork, so you finance the work in the meantime.
- Fixturing period — rent-free time to build out. Make sure it matches a realistic schedule, permits included.
- Restoration — what you must remove or restore when the lease ends.
- Signage rights — size, location and landlord approval.
5. Walk it with a contractor
Before you sign, walk the space with a contractor who will tell you what the building services can support, what the fit-out is likely to cost, and how long it will take. Use the fit-out cost estimator and timeline estimator for a first pass, then get real numbers. See also what a commercial fit-out costs in Ontario.
What should I check before signing a commercial lease for a fit-out?
What the landlord delivers versus what you pay for, whether HVAC, electrical, plumbing and fire protection support your use, zoning, landlord approval rules, the tenant improvement allowance and when it's paid, the fixturing period, and restoration obligations.
What is a tenant improvement allowance?
Money the landlord contributes toward your fit-out. Check the amount, what it can be spent on, and when it is paid — often only after the work is complete.
Should I get a contractor involved before signing a lease?
Yes. A site walk before signing tells you what the building services can support and roughly what the fit-out will cost, while you can still negotiate.
References
- O. Reg. 278/05, Designated Substance — Asbestos on Construction Projects and in Buildings and Repair Operations (Ontario).
General information, not legal or real-estate advice. Have your lease reviewed by your own lawyer.