9.28 A. The Build-Out Workletter

• Jurisdiction: New York

A. The Build-out Workletter

The workletter, which provides for the build-out, may be a separate contract that sets out rights and liabilities for finishing off a building’s interior space before the tenant moves in. Whether separate or included in the body of the lease, it describes a unique relationship between landlord and tenant during the initial build-out. It covers installation of interior walls, fixtures, flooring—all the finishing work—and provides a timetable for completion. It must also specify what the landlord is obligated to provide—base building work—regardless of any agreement about tenant improvements.

Build-out costs often exceed budget because of delays. Many landlords propose workletters that recognize two...