What is the definition of "tenant improvement"?

The definition of "tenant improvement" refers specifically to the modifications made to a rental space to meet the specific needs of a tenant. These improvements can include alterations such as adding walls, painting, or installing specialized fixtures that align with the tenant's business requirements or aesthetic preferences. Tenant improvements are often outlined in the lease agreement and can be a crucial factor in ensuring tenant satisfaction and functionality in a leased space.

The focus on tenant needs distinguishes this concept from other types of property modifications that may be more general or directed by the landlord for overall property enhancement or value increase. For instance, changes made by the owner typically reflect the owner's intention to improve the property for all tenants or future sales rather than accommodating a specific tenant's desires. This makes the understanding of tenant improvements pivotal in property management and leasing practices.