Oregon 30-Hour Real Estate Law Practice Test

What type of maintenance involves modifying space to meet a tenant's specific needs?

1. Preventive maintenance

2. Capital improvements

3. Tenant improvements

4. Corrective maintenance

The correct answer is: Tenant improvements

The type of maintenance that involves modifying space to meet a tenant's specific needs is tenant improvements. Tenant improvements, often referred to as "TI," are changes made to the interior of a commercial rental property that cater specifically to the requirements of a tenant. This can include alterations such as installing partitions, adjusting lighting, or upgrading fixtures to create an environment that supports the tenant’s business operations. In various leasing agreements, the landlord may agree to provide a certain allowance for tenant improvements, enhancing the appeal of the space and ensuring that it is suited for the tenant’s operational needs. This is particularly common in commercial real estate as businesses often require unique configurations that standard spaces do not provide. Preventive maintenance, capital improvements, and corrective maintenance serve different purposes. Preventive maintenance focuses on routine upkeep to prevent issues before they arise. Capital improvements refer to significant upgrades that enhance the overall value of the property but are not specifically tailored to the needs of a single tenant. Corrective maintenance is reactive, addressing repairs and ongoing issues in the property rather than modifying space for a tenant's specific use. Thus, tenant improvements distinctly align with the customization of spaces for tenants’ use.