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Commercial Fitout: Who Pays for the Electrical, Landlord or Tenant?

  • 1 day ago
  • 3 min read

Every commercial lease splits the building into what the landlord provides and what the tenant fits out. The electrical work sits right on that line, which is why it's one of the most commonly disputed items — both at the start of a lease and, more painfully, at the end. What follows is how the split usually works in practice. Your lease governs, so read it, and get advice on the wording if the numbers are significant.

Negotiating a lease and unsure what the tenancy actually has? Call 021 889 770 — we'll inspect and tell you what you're inheriting before you sign.

Base building: usually the landlord

  • The incoming supply, the main switchboard and the building's distribution

  • Metering to the tenancy, and the submain feeding your distribution board

  • Common area lighting and power — lobbies, stairs, carparks, shared toilets

  • Building-wide specified systems — fire alarms, sprinklers, lifts, and the building warrant of fitness that covers them

Tenant fitout: usually you

  • Everything inside the tenancy: your lighting, power outlets, dedicated equipment circuits, data cabling

  • Your distribution board, if the fitout needs one beyond what's provided

  • Emergency and exit lighting within your tenancy, reflecting your layout

  • Any supply or capacity upgrade your use makes necessary — this one surprises people, and it is usually the tenant's cost

The make-good clause

Most leases require the tenant to reinstate the premises at the end of the term — remove the fitout and return the space to the condition it was handed over in. For electrical work that can mean stripping out lighting, circuits, data cabling and the board you installed, and making good what's left. Businesses budget carefully for the fitout and almost never budget for the strip-out, then get an unwelcome number in their final year. Two things help: know what the clause says on day one, and keep the fitout documentation, including your Certificate of Compliance, so there's no argument about what you installed versus what was already there.

Before you sign: three things to check

  • Capacity: does the supply to that tenancy carry your equipment? If not, who is paying for the upgrade — and is that in writing?

  • Condition: what's the state of the existing fitout you're inheriting, and is any of it unsafe or non-compliant?

  • Reinstatement: what exactly must come out at the end, and is there a documented record of the handover condition?

Frequently asked questions

Will a landlord contribute to fitout costs?

Often, as an incentive — a contribution, a rent-free period, or the landlord carrying specific base-build items. It's a negotiation, and a costed electrical scope strengthens your position because you can show what you're actually asking for.

Who owns the fitout at the end of the lease?

Depends entirely on the lease. Some leases have fitout become the landlord's property; others require removal. Sometimes the landlord waives removal if they like the fitout — but rely on that in writing, not on goodwill.

Can you provide a condition report before we take a lease?

Yes. A pre-lease electrical inspection documents the state of the existing installation, flags safety issues and identifies capacity limits — useful for negotiation and as a baseline for make-good at the end.

Know what you're taking on

EWRB-registered electricians · Written condition reports · Based in Remuera, servicing Auckland-wide

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