Commercial Tenant Improvement Change Orders: What Owners Should Review

A tenant improvement change order should answer three questions before an owner approves it: What changed from the agreed scope? What will it cost? What happens to the schedule? If any one of those answers is missing, the owner is being asked to approve a number without the decision behind it.

This is a different review from closing out the project after the work is done. The change-order decision happens while the scope can still be clarified. Before deciding who can approve a change or pay for it, check the lease and the signed project agreements. Keep those documents beside the proposal instead of assuming that every request belongs to the owner.

Compare the request with the approved scope

Ask for the original scope, the current drawing or specification, and the proposed change in one packet. The description should identify the affected suite and the exact work item. "Additional electrical work" is too broad to tell an owner whether the request covers a new outlet, a panel change, or work already included in the base contract.

Separate a tenant preference from a field condition and from a correction to the original plan. Those may lead to different decisions under the lease and project agreements. A photo, marked drawing, or field note can explain why a change is proposed. It does not, by itself, settle responsibility for the cost.

Read cost and schedule together

The proposal should show the added work, any work removed, the net price change, and the revised project total. If a credit offsets part of the change, show it. If the contractor says the price is unchanged, put that in the record too. The owner should be able to trace the revised total back to the original contract and earlier approved changes.

Ask whether the change affects the completion date or a handoff the tenant is counting on. A small item may have a long lead time. A large price change may have no schedule effect. Don't infer either from the dollar amount. The AIA's change-order guidance treats scope, cost, and time as the core parts of a documented change. Check your project's contract for the process that applies.

Keep the allowance ledger separate

A tenant improvement allowance is not the same thing as the project's total cost. Show the original allowance, amounts already approved against it, this proposed change, and the balance that would remain. Then identify which party is expected to pay any amount outside the allowance, subject to the lease and approvals. This keeps a project-cost decision from being mistaken for a lease interpretation.

If the proposal includes a contingency or an estimate rather than a fixed amount, say so plainly. Record what would convert the estimate into an approved final price. A running ledger prevents an owner from reviewing each change in isolation while losing sight of the total commitment.

Record the decision before the work moves

The packet should name the person with approval authority, the decision date, the approved version, and any conditions. Do not let a revised quote replace an earlier one without a version trail. If the work is urgent, document the immediate direction and follow the authorization process required by the signed agreements. An email saying "go ahead" may leave the owner unable to tell which price and scope were accepted.

When the work is finished, carry the change into the final cost record and the project closeout file. The Coastline owner repair-reporting guide covers the broader need to connect approval, completed work, and cost. The commercial owner scorecard gives owners another way to check whether decisions and open items appear in reporting.

The owner's five-minute review

Before approving a change, ask for the base scope, the marked change, the net cost, the schedule effect, and the updated allowance ledger. Confirm who is authorized to decide. If the packet cannot answer those questions, send it back for a complete explanation. That is easier than sorting out an undocumented change after the invoice arrives.

If your property reports leave project changes or owner approvals hard to trace, Request a Property Management Performance Review.