The short answer: Before you sign a lease on a space you plan to build out, confirm the city allows your type of business at that address, find out whether past work in the suite was permitted, have the building’s electrical, HVAC, plumbing, and fire systems checked against what you need, and read the work letter to see exactly who pays for what. Most of the expensive surprises in a build-out can be found before you sign. After you sign, they usually become your problem.
You found the space. The location is right, the rent works, and the landlord is offering a tenant improvement allowance. Your broker is sending over the lease.
Here’s a costly mistake: treating the lease as a real estate decision and the build-out as a problem to solve later. They’re the same decision. The lease decides who pays for the walls, wiring, restrooms, and code upgrades. The building decides how big those bills will be.
Below are the questions worth answering before you sign, plus a checklist for your walk-through.
“Is my business even allowed at this address?”
Start with zoning, because if the answer is no, nothing else matters.
The City of Los Angeles Business Portal tells owners to check zoning “before signing a lease.” It suggests looking up the property in ZIMAS, the city’s online zoning map, and then confirming with the city’s Development Services Centers that your business use is allowed in that zone. The portal also points out that zoning affects requirements like customer parking, and that seeking an exception “is often a costly and time-consuming process.”
Long Beach gives similar advice. Its retail permitting guidelines say to check with the Planning Bureau that the location is zoned for your proposed use, and to ask what planning permits (such as an Administrative Use Permit) might be required.
Every city runs its own system, so call the planning counter for the exact address. And don’t assume: a similar business there before is a good sign, not proof. A fitness studio or medical office can fall into a different use category than “retail,” and some uses are allowed only with a use permit, which adds time and fees.
If you’re turning a store into a food business, this question gets bigger. Our guide to turning a retail space into a restaurant explains what “change of use” means and why it matters.
Once you know you’re allowed to be there, the next question is what the last tenant left behind.
“Was the work already in here done with permits?”
Long Beach’s guidelines put it plainly: “Ask the Building and Safety Bureau if all building improvements have been permitted.”
Walls, restrooms, or wiring built without permits don’t disappear when the old tenant leaves. When you apply for your own permit, the building department may require that work to be legalized or removed. That cost is easy to miss in a lease negotiation and hard to absorb mid-construction.
How to check:
- Request the permit history for the address from the city’s building department.
- Compare it to what you see in the space. A finished room with no matching permit is a question worth asking.
- Ask the landlord what occupancy approvals exist for the current use.
Paperwork checked. Now it’s time to look at the building itself.
“Will the building actually support what I’m planning?”
A space can look move-in ready and still be short on what your business runs on. The table below reflects common pre-lease questions from a builder’s point of view, not code requirements. Your needs depend on your use, equipment, and layout.
| System | What to ask | Why it can change your budget |
|---|---|---|
| Electrical | What size is the service to the suite, and is there room in the panel? | Equipment-heavy uses may need a larger service, which can involve the utility and its schedule |
| HVAC | How old are the units, who maintains them, and who replaces them if they fail? | Replacing a rooftop unit is a large cost. The lease should say whose cost it is |
| Plumbing | How many restrooms are there, and where are the water and sewer lines? | Your use and occupant count can require more or different restrooms. Moving sinks far from existing lines adds cost |
| Fire and life safety | Are there fire sprinklers and an alarm system, and are they current? | Layout changes often require sprinkler head and alarm device changes, reviewed by the fire authority |
| Accessibility | Is there an accessible entrance, path of travel, and restroom? | Alterations can trigger accessibility upgrades (more on who pays below) |
| Roof and structure | Can the roof take new equipment? Any signs of leaks or cracking? | Heavy rooftop equipment or new openings may need engineering |
Also keep in mind that new work is designed to the current code. California’s 2025 building code edition took effect January 1, 2026, and cities can add local amendments.
So who pays for all of this? That depends on a document many people skim.
“What does the landlord’s TI allowance really cover?”
The terms that control your build-out usually live in the work letter, an exhibit to the lease. Most deals fall into one of three shapes:
| Deal type | How it works | What to watch |
|---|---|---|
| As-is | You take the space in its current condition and pay for the build-out | Every existing problem becomes yours unless the lease says otherwise |
| Allowance | The landlord contributes up to a set amount, and you pay the rest | Whether the allowance actually covers your plan |
| Turnkey | The landlord builds to approved plans | Your later changes are usually at your cost, and quality is less in your control |
An allowance sounds simple, but the details decide how far it goes. Ask:
- Is it a lump sum or a per-square-foot amount, and is it enough for your plan once you have a real estimate?
- Can it pay for design, engineering, and permit fees, or only construction?
- Is it paid as work progresses, or reimbursed after completion (and what paperwork, like lien releases, does the landlord require)?
- What happens to any unused amount?
- Does the landlord need to approve your plans or contractor, or charge a supervision fee?
A rough line-item budget from a contractor, before you sign, turns “the allowance should cover it” into a number you can negotiate with.
“Who pays if the inspector requires upgrades?”
This is where “as-is” language can hurt. Altering a space can trigger required upgrades beyond your plans, such as accessibility, fire, or restroom changes. If the lease is silent on who pays, you may find out at plan check.
Accessibility has a specific California rule. Civil Code section 1938 requires commercial leases to state whether the property has been inspected by a Certified Access Specialist (CASp). If it hasn’t, the lease must say that the landlord may not prohibit you from getting a CASp inspection, and the parties must agree on who pays for the inspection and for any repairs needed to correct accessibility violations. When a CASp report identifies violations, repairs are presumed to be the landlord’s responsibility unless the two sides agree otherwise.
We’re contractors, not lawyers, so have your attorney and broker review how your lease handles code-required work. Ask them to look at both accessibility and the other upgrades your project could trigger.
“When does rent start?”
If rent starts on a fixed date and permits run long, you pay rent on a space you can’t use. Many tenants ask to tie rent commencement to delivery of the space, permit approval, or completion of the build-out. Ask your broker and attorney what’s realistic. For a phase-by-phase picture, see our guide on how long a commercial tenant improvement takes.
Your pre-lease checklist
- Confirmed with the planning department that my use is allowed here, and whether a use permit or parking change applies
- Pulled the permit history and compared it to the space
- Asked what occupancy approvals exist for the current use
- Walked the space with a contractor (electrical, HVAC, plumbing, restrooms, fire systems, roof)
- Got a rough line-item budget for my build-out
- Read the work letter: as-is, allowance, or turnkey
- Know what the allowance covers, how it’s paid, and what happens to the unused part
- Know who pays for code-required upgrades, and reviewed the CASp disclosure
- Know when rent starts and what happens if permits run long
What can I check myself, and when do I need a pro?
Plenty of this homework is yours: look up the zoning, call the planning counter, request the permit history, ask the landlord for the work letter, building rules, any CASp report, and existing drawings, and list your equipment, staff, and hours.
Then bring in professionals. A contractor walk-through tells you what the space can handle and roughly what the build-out costs. A designer or architect can test whether your layout fits. Engineers join for structural or mechanical, electrical, and plumbing changes. Your attorney and broker handle the lease language.
DCI is a Signal Hill general contractor, in business since 2001, serving greater Los Angeles and Orange County. Our commercial tenant improvement team guides permitting, inspections, and code-compliance coordination, with step-by-step outlines and line-item project costing. That breakdown is most useful before the lease is signed.
FAQ
What should I check before signing a commercial lease for a build-out? Zoning for your use, the permit history, the building systems, and the work letter, including who pays for code-required upgrades.
What is a tenant improvement allowance? It’s money the landlord contributes toward building out your space, usually up to a set amount. You typically pay anything above it. The work letter spells out what it covers and how it’s paid.
How do I find out if my business is allowed at a location? Look up the property’s zoning on your city’s zoning map, then confirm with the planning department that your specific use is allowed. Ask whether a use permit is required.
Who pays for accessibility upgrades in a California commercial lease? It depends on the lease. Under Civil Code section 1938, repairs identified in a CASp report are presumed to be the landlord’s responsibility unless the parties agree otherwise. Have an attorney review the lease.
Should I have a contractor look at a space before I sign the lease? Yes, if you plan to build out. A walk-through flags system issues early, and a rough budget shows whether the allowance is realistic.
Looking at a space? Walk it with a contractor before you sign
If you’re comparing spaces or about to sign, the most useful next step is a walk-through and a rough line-item budget. We’ll look at what the space has, flag what’s likely to need upgrades or review, and give you real numbers to bring to your lease negotiation.
Give us a call at 562-425-1050 or email us at info@desistogc.com (dcidirect.net)