Commercial Remodel Planning: Leases, Permits, Accessibility and Downtime

Commercial projects differ from home projects in who gets a say. A homeowner mostly answers to the City. A tenant also answers to a landlord, an insurer, sometimes a franchisor, and a customer base that notices every day the doors are closed. The planning below follows the order these constraints appear.

Start with the lease

Your lease usually decides what you can change before any designer picks up a pencil. Read it for:

• Landlord approval of plans, finishes and the contractor
• Whether a tenant improvement allowance is offered, and how and when it is paid
• Insurance requirements, including the certificates the landlord expects from your contractor
• Permitted work hours, and rules for loading docks, elevators and shared areas
• Who owns the improvements, and whether you must restore the space when the lease ends
• Signage rules
• Key dates, such as when rent begins relative to when you can realistically open

Many costly surprises trace back to a lease clause nobody read until the contractor asked about it.

Define the program and the budget

Write down what the space must do: how many people work or dine there, which equipment is essential, how customers move through, what must be stored and where deliveries arrive. Sort the list into must-haves and nice-to-haves, because the budget will force a choice.

Build the budget in layers, not as one number:

• Design, engineering and plan preparation
• City plan review and permit fees, plus the refundable Construction and Demolition Diversion Deposit the City requires
• Construction
• Equipment, furniture, fixtures and signage
• Moving, utilities and lost revenue while the space is closed
• A contingency for what the walls reveal

Plans, permits and review in San Jose

According to the City, tenant improvement plans are required and are reviewed by staff for zoning, building and fire code compliance before a building permit is issued. The City recommends professionals prepare the plans, because inaccurate plans cause resubmittals and added fees. It also refers to a list of plans that require an architect or engineer, and it recommends that the permit applicant be a licensed contractor. An owner who applies must sign an Owner-Builder Acknowledgement, and the person who signs is responsible for all permitted work.

Programs and eligibility change. Confirm with the Permit Center before you plan around any of them.

The City’s tenant improvement page lists these steps before you apply:

1. Review the design considerations that can affect your project’s design, location and permitting.
2. Assemble the application package: the Building Permit Application, the Commercial and Industrial Projects Submittal Checklist, the Tenant Improvements Plan Checklist and the Plan Review Submittal Package.
3. Pay the refundable Construction and Demolition Diversion Deposit.
4. If they apply, obtain a Geologic Hazard Clearance, a Historic Preservation Permit, Adjustment or Amendment, or the Owner-Builder Acknowledgement.
5. Check whether other processes apply, such as the CALGreen code, the EPA lead rule for older buildings, equipment mounted on roofs, floors or walls, generator permits and temporary certificates of occupancy.

Once the permit is issued you receive a Permit Card that lists the required inspections. Keep the card and the plans on site, and make sure the inspector can reach all the work areas. Schedule inspections at SJPermits.org or by calling 408-535-3555.

Accessibility

Accessibility is where tenants are most often surprised. The City’s Bulletin #226 explains that Title 24 of the California Building Code is the primary standard and that meeting it also meets the federal ADA construction guidelines. It notes that the ADA has no grandfathering provisions. For commercial remodels, the bulletin says the remodeled area must include:

• Accessible parking spaces close to accessible building entrances
• Signs at inaccessible entrances that point to the accessible entrance
• A path of travel to the remodeled area
• Accessible toilet facilities, public telephones and drinking fountains

The bulletin also covers restrooms: workplaces with five or more employees must have separate male and female toilet facilities under the California Labor Code, and accessible toilets must be included. For cost thresholds, it refers readers to a valuation threshold resource from the Division of the State Architect. Raise accessibility with your designer at the start, because the answer can change the scope and the budget.

Restaurants and food service

Remodels of restaurants, cafes, bars and other food or beverage businesses have their own City page. Plans are reviewed for zoning, building and fire code compliance, and qualifying projects can use the Streamlined Restaurant Program. Food businesses must also comply with County health regulations, and the City notes that the City and County reviews can happen at the same time. The program’s own guidance says it works best when the required County Department of Environmental Health plans and the City Fire Department hazmat permits are already approved. Start those conversations before the building plans are final.

Scheduling to protect revenue

• Phase the work so part of the business can keep operating, or so the closure is as short as possible.
• Work after hours where the lease and the neighbors allow it, and agree on noise, dust and access rules in advance.
• Order long-lead items first. Equipment, storefront glazing, millwork and lighting often set the opening date.
• Line up inspections. Rough and final inspections are milestones, so build them into the schedule instead of treating them as surprises.
• Tell your customers. Temporary signage, a social post and a new opening date matter more than a perfect construction schedule.
• Match the permit timeline to the lease. If rent starts before you can open, every week of review costs money.

How commercial contracts differ

California’s home improvement contract rules are written with homeowners in mind, so a commercial contract leaves more to negotiation. That makes the terms matter more. Look closely at:

• How and when you pay, and any amount held back until completion
• The process for change orders and who can approve them
• The schedule, and what happens if it slips
• Insurance certificates, including any the landlord requires
• Lien waivers with each payment
• Warranty terms
• Who obtains permits and pays the fees

Ask a business attorney to review the agreement, and check your contractor’s license on the CSLB website as described in our guide to hiring a licensed contractor.

Closeout

• Final inspection and sign-off, plus a certificate of occupancy where one is required
• A punch list with dates for each fix
• As-built drawings, equipment manuals and warranties
• Training on any new equipment
• Final lien waivers and the last payment
• Keys, codes and access instructions

Before you hire: a checklist

• Lease reviewed, and landlord approvals obtained
• A written program of needs and a layered budget
• A designer engaged, and accessibility discussed early
• The right City review option identified
• A licensed contractor with commercial references
• Insurance certificates that satisfy the landlord
• A schedule that protects revenue and matches lease dates

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