Data Cable and The Restoration Clause

Before every desk in every office had to be wired with dedicated data lines, restoration clauses were primarily focused on removing any specific construction that the landlord couldn’t redeploy for a new tenant.  As office space becomes more generic and communications requirements become more specialized, there is an incentive for landlords to pass the cost of restoring the premises on to the departing tenant.

Most organizations are moving towards more open layouts and fewer private offices.  Many employees are now seated in a cubicle environment that costs less to install and provides a more efficient layout.  It’s easy for one operation to take advantage of much of the existing layout, thereby minimizing construction and allowing the landlord to provide competitive pricing (of course, landlords are also happy to avoid any upfront costs associated with a tenant improvement allowance).

With the advent of high speed connectivity for every employee and the evolution of data lines and the additional capacity that comes with each new upgrade, landlords have become concerned with the huge assemblies of wiring in their walls and above finished ceilings.  Every time a tenant installs cubicles or reconfigures an office, the natural inclination is to simply cut the wires where they exit the wall and leave the remaining cable inside the wall.  The cost for removing cabling inside the wall can be exorbitant and landlords are making their restoration clauses much more detailed and diligently enforcing these clauses at lease expiration.

The cost of restoring the premises should be discussed as part of the lease negotiations. Because it’s not an immediate cost, it’s easy to overlook and “kick down the road” to be dealt with later. But it’s important to understand what financial implications that may remain at the end of the term. There’s nothing worse than getting stuck with a surprise invoice as your parting gift as you depart.

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