Tenant improvement change orders are where good commercial GCs quietly lose money. A TI job looks simple on paper: gut a suite, frame some offices, run new power and data, drop a ceiling, hand over the keys. Then the tenant's operations manager walks the space and wants the break room moved. The landlord's property manager says any change to the ceiling grid needs their sign-off. The architect is on vacation. And the tenant's lease start date doesn't move an inch.
If you handle that change with a nod and a text message, you're not being flexible. You're taking on work with no clear payer, no approved price and no extra time, on a job where the schedule is carved into somebody else's lease.
Why tenant improvement change orders are riskier than most
On a typical residential job, you've got one client. On a TI job, you've usually got at least three parties with a stake in every change:
- The landlord, who owns the building, often controls the TI allowance, and may have to approve anything touching structure, MEP systems, the roof or common areas.
- The tenant, who is usually the one asking for changes and who pays for anything beyond the allowance.
- The design team and property manager, who may need to review drawings or sign off before work proceeds.
Your contract might be with the landlord, the tenant or both, depending on how the lease is set up. That's exactly the problem. When a change comes in, the question isn't only "what does it cost?" It's "who is allowed to approve this, and who is actually going to pay for it?" Get that wrong and you can do perfect work and still not get paid for it.
Add a hard move-in date, after-hours work restrictions in occupied buildings, and long-lead items like storefront glass or rooftop units, and every unmanaged change hits your schedule harder than it would on an open-ended project.
What a bad TI change order actually costs you
Here's how a single loose change plays out on a real-world TI job. The tenant asks, on a Tuesday walk, to add four duplex outlets and a dedicated circuit for a server closet. Your electrician says it's about a day and some material. You say "no problem" and keep moving.
- The allowance fight. Three weeks later you bill it. The landlord says it's a tenant extra, not an allowance item. The tenant says they assumed it came out of the allowance. Nobody signed anything, so nobody agreed to anything.
- The approval gap. The property manager points out the dedicated circuit required a panel change nobody approved. Now you're explaining yourself instead of invoicing.
- The schedule squeeze. The extra circuit pushed ceiling close-in by a day, which pushed the inspection, which pushed flooring. You never asked for time, so as far as anyone's concerned, the delay is yours.
- The closeout standoff. At the end, the "small stuff" adds up to real money that's in dispute, and it's holding up your final payment and retainage.
None of that is exotic. It's what happens when one party asks, another party pays, and nobody writes it down.
6 tenant improvement change order mistakes GCs make
1. Taking direction from whoever is standing in the space
The tenant's office manager is not necessarily authorized to approve anything. Neither is the landlord's leasing agent. If you take verbal direction from the wrong person, you may find the party with the checkbook refuses to honor it. The cost: work you performed in good faith that no one with authority ever agreed to pay for. Before the job starts, get names, in writing, of who can approve changes for each party. We cover this in more depth in who should sign a change order.
2. Not saying who pays: allowance, tenant or landlord
Every TI change order should state plainly whether the cost comes out of the TI allowance, gets billed directly to the tenant, or is a landlord cost. If you leave it blank, you're setting up a three-way argument at billing time. The cost: slow payment at best, a write-off at worst.
3. Skipping the landlord's approval on building systems
Many commercial leases and work letters give the landlord approval rights over changes to structure, fire protection, HVAC, electrical service or the roof. The specifics depend on the lease, which is why you need to read the work letter, not assume. The cost: tearing out work the landlord never approved, or a property manager who stops cooperating with your crew.
4. Pricing the change but ignoring the time
A TI schedule is usually built backward from the tenant's move-in or rent start date. When a change adds days, and you don't ask for them in the change order itself, you've quietly agreed to absorb them. The cost: overtime, weekend crews, or finger-pointing when the space isn't ready. If time matters, spell it out. Our guide on change order time extensions shows how.
Grab the free Excel change order template
A professional, auto-calculating change order spreadsheet — line items, markup, tax and your revised contract value all worked out for you, plus a log to track every change order on the job. Free to download and use on any project.
Download the free Excel template →5. Batching "small stuff" to sort out at the end
It feels efficient to keep a list of little changes and settle up at closeout. It's not. By then, memories are fuzzy, the tenant's contact may have changed, and every item is a negotiation. The cost: a pile of disputed extras holding your final payment hostage. Write each change up when it happens, while everyone still agrees on what was asked.
6. Losing track of the running total against the allowance
Tenants often don't realize how fast they're burning through the allowance. If you don't show the running total on every change order, the first time they see the overage is on your invoice. The cost: an angry tenant, a stalled payment and a relationship you probably won't get back. Show the original contract value, this change, and the revised total every single time.
The right way to handle tenant improvement change orders
The fix is not complicated. It's discipline. Every change, no matter how small, gets a written change order before the work starts, with these items on it:
- A clear description of the change and where it is in the space
- Who requested it and who is approving it (by name and company)
- Who pays: TI allowance, tenant direct, or landlord
- Labor, material, sub costs and markup, or a clear lump sum
- Any added days to the schedule, and the effect on the completion date
- The revised contract total, and the running total against the allowance
- Signatures from the authorized parties, dated
There are two free ways to get that done consistently. Pick whichever fits how you work.
If you like working in a spreadsheet, our free Excel change order template has line items, markup, tax and the revised contract value already set up, plus a change order log so you can track every TI change and the running allowance balance on one tab. Fill it in, save it as a PDF, send it for signature. It's a solid option for PMs who live in Excel and want everything on their laptop.
If you'd rather get it signed on the spot, the free ChangeOrdersPro change order tool lets you write the change on your phone during the walk, send it to the tenant or landlord, and have them sign from their own phone before you leave the suite. The contract total updates itself, and you've got a signed record with a date and time on it. It's a solid option for supers who are in the field more than at a desk.
Both are free, and here's why we keep it that way. Use whichever one you'll actually use on every change, because consistency is the part that protects you.
Skip the Word doc. Send it in 30 seconds.
ChangeOrdersPro turns this into a 30-second job — fill in the change, hit send, and your client signs from their phone. The contract total updates itself. It’s 100% free.
Create a free change order →A quick TI change order checklist before work starts
Run through this at preconstruction and again whenever a new contact shows up on the job:
- Read the lease work letter, or ask for the relevant sections, so you know what the landlord must approve.
- Get written confirmation of who can approve changes for the landlord and for the tenant.
- Agree up front how changes will be billed: against the allowance, to the tenant, or to the landlord.
- Set a rule: no change work starts without a signed change order. Tell your subs the same.
- Keep a change order log with a running total against the allowance, and share it at every OAC meeting.
- Note schedule impact on every change, even when it's zero days, so there's no argument later.
Want the fields already laid out? Download the free change order spreadsheet and use the log tab as your running TI tracker, or create a change order in the free app and send it for a phone signature in under a minute. For more on keeping the paper trail tight on commercial work, see change order documentation, or browse all of our change order guides.
Frequently asked questions
What is a tenant improvement change order?
It's a written change to the scope, price or schedule of a tenant improvement (TI) build-out, such as adding outlets, moving walls or upgrading finishes. On TI jobs it should also state who is approving the change and whether the cost comes out of the TI allowance, is billed to the tenant, or is a landlord cost.
Who pays for change orders on a tenant improvement project?
It depends on the lease and your contract. Changes might be covered by the landlord's TI allowance, billed directly to the tenant once the allowance is used up, or paid by the landlord for base-building items. Because it varies, every TI change order should say in writing who pays before the work starts.
Can I use an Excel template for tenant improvement change orders?
Yes. The free ChangeOrdersPro Excel change order template calculates line items, markup, tax and the revised contract value, and includes a change order log you can use to track the running balance against the TI allowance. Save it as a PDF and send it for signature.
Does the landlord need to approve TI change orders?
Often, especially for changes touching structure, building systems, the roof or common areas, but the rules come from the specific lease and work letter. This is general information, not legal advice; check your contract documents and, if in doubt, a licensed attorney.
Daisy writes about the unglamorous side of running a build — the paperwork, the change orders, and the conversations that keep a job profitable. ChangeOrdersPro is the free tool her team built so contractors can send a professional change order and get it signed from a phone in about 30 seconds.