Tenant Improvement Contracting
Tenant improvement work is a contracting problem more than a construction problem. Drawings, the lease, the landlord’s rules and the permit path all have to line up before the first wall goes up.
- Houston metro
- Written scope before work begins
- Licensed trade subs where required
- Free estimate
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Overview
Tenant Improvement Contracting
Every tenant improvement has at least three parties who can stop it: you, the landlord, and the authority that reviews permits for that address. Often there is a fourth, such as a franchisor, a lender or a licensing agency. None of them coordinate with each other. The contractor’s real function on a TI job is keeping those approval tracks moving in parallel instead of one after another.
The second reality is that drawings describe the intended building and the space describes the actual one. As-built documents for existing suites are usually old, incomplete or wrong. Almost every painful change order on a tenant improvement traces back to a condition nobody verified, a decision made late, or a scope item that neither the base building nor the construction drawings claimed.
The things that actually decide this job
Survey the existing conditions before pricing
Two hours in the suite with a ladder removes most of the risk. Verify clear height above the ceiling, panel capacity and available breaker space, rooftop unit tonnage and age, restroom compliance, sprinkler main location and head type, structure above the grid, and whether the floor is level. Photograph everything. A price built on a survey is a price; a price built on a lease exhibit is a guess.
Keep a written scope-gap register
The expensive items usually sit between documents: fire alarm device relocation, sprinkler head moves, ceiling patch at demising walls, door hardware keyed to the building system, window coverings, the telecom demarcation extension, appliances, signage, security and access control, and final cleaning. List them at bid time and assign each to a party. An unassigned item is a change order waiting for a date.
Map the permit path early
The jurisdiction follows the address, not the mailing city, and submittal standards differ between them. Beyond the general permit there are trade permits and, for sprinkler and fire alarm work, separate shop drawing submittals with their own review queue. Those sub-permits frequently control the schedule, because ceilings cannot close until that rough-in is inspected. Identify who reviews what during design, not the week you plan to start.
Control changes in writing, before the work
Every change gets a written description, a price on the same unit basis as the original bid, a schedule impact and a signature before anyone builds it. Where the landlord’s allowance funds the work, their approval belongs in the same document. Keep a running log both sides can read at any time. Verbal field direction is how a project reaches completion with an unresolved balance and a strained relationship.
Practical considerations
Asbestos and lead survey obligations
Before renovating or demolishing in an older public or commercial building, Texas rules require an asbestos survey by a licensed inspector, and disturbing lead-based coatings carries its own requirements. This applies to buildings far newer than most people assume. Have the survey done during due diligence, because a positive result found after demolition starts means a stopped job, abatement, notification periods and a schedule you no longer control.
What the landlord will require on paper
Expect certificates of insurance naming specific additional insureds at specific limits, waiver of subrogation, subcontractor certificates, a contractor rules acknowledgment, badging, and sometimes a preferred vendor for roof, fire alarm or life safety work. Some buildings require notice periods and after-hours scheduling for anything noisy. Collect these requirements before bidding, because insurance limits and mandated vendors change the number.
How payment gets documented in Texas
Commercial projects here run on monthly pay applications with lien waivers exchanged at each draw, statutory retainage held on the contract, and notice deadlines counted from the month labour or materials were furnished. Those deadlines are short and unforgiving for everyone in the chain. Agree the billing format, the required backup and the waiver forms at contract signing, and take questions about your specific rights to your attorney.
Schedule items nobody controls
Switchgear, rooftop units, elevators and some glass run on manufacturer lead times measured in months. Utility work follows the utility. Permit review follows the review queue. Storm season can close a site for days. An honest TI schedule shows those items as fixed-duration constraints with order-by dates, rather than burying them inside a construction bar that implies they can be compressed with more labour.
At a glance
| Delivery condition | What you generally receive | What you still have to buy |
|---|---|---|
| Cold dark shell | Slab, exterior walls, roof, utilities stubbed nearby | HVAC, distribution, restrooms, ceiling, sprinkler drops, all of it |
| Warm shell | Unit set, service to a panel, sprinkler main, sometimes restrooms | Distribution, partitions, ceiling, finishes, data |
| Vanilla box | Level floor, finished walls, ceiling, lights, one restroom | Your layout, finishes, HVAC changes, data, casework |
| Second generation | A previous tenant’s completed layout | Demolition, code and accessibility upgrades, deferred repairs |
| As-is | Exactly what you saw on the walk | Every repair; verify systems run before you sign |
| Landlord turnkey | A build to one agreed plan | Anything outside that plan, plus the cost of approval delay |
Common questions
Who hires the contractor, me or the landlord?
Both structures are common and the lease says which applies. Tenant-hired means you control selection, pricing and schedule, and you bill the allowance to the landlord against documentation. Landlord-hired, sometimes called turnkey, means they build to an agreed plan and you have less control over both cost and pace, though also less exposure. Either way, be clear about who approves changes, who carries the risk when the plan changes, and how disputes about quality get resolved before you sign.
What actually causes most change orders?
Three things, in order. Unknown existing conditions, meaning what was found above the ceiling or under the floor. Late decisions, where a finish, a door or an equipment selection arrived after the wall it affects was built. And scope gaps, items neither the base building nor the drawings claimed. All three are reducible. A real conditions survey, a decision schedule with dates attached, and a written scope-gap register handle most of it before the contract is even signed.
Should I bid lump sum or cost-plus?
Lump sum suits well-defined work with complete drawings and a known existing condition, because you buy price certainty and the contractor carries the risk of their own estimate. Cost-plus with a guaranteed maximum suits projects where the scope is still moving or the building holds unknowns, since you see actual costs and share savings while the maximum caps exposure. The wrong pairing is lump sum on incomplete drawings, which converts every ambiguity into a change order argument.
How long does permitting take here?
It varies by jurisdiction, by how complete your submittal is, and by the current review backlog, so treat any single number with suspicion. What you can control is correction cycles. A complete, coordinated set with the required calculations, energy compliance documents and accessibility information reviewed once beats a thin set submitted early and corrected three times. Ask the reviewing authority for their current expectations before you submit, and start any state-level accessibility registration in parallel rather than afterwards.
Do I need an architect for a small tenant improvement?
Usually yes for commercial work. Most jurisdictions in this region want plans sealed by a Texas-registered architect or engineer for interior alterations, and anything involving structure, egress changes or a change of use certainly does. Some very limited, non-structural cosmetic work is accepted with contractor-prepared drawings, but the building official for that address makes the call. Ask before you spend money on drawings, since a rejected submittal costs more than the design fee you were trying to avoid.
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