Which term describes an improvement made to a leased space that benefits the property but is owned by the tenant?

The term that describes an improvement made to a leased space, which benefits the property but is owned by the tenant, is known as a leasehold improvement. Leasehold improvements refer to alterations or enhancements made by the tenant to a rental property to better serve their business needs. These improvements remain part of the property even after the lease ends, but they are typically owned by the tenant.

This distinction is important in property assessments because it highlights the investment made by the tenant in the property, even though they do not own the property itself. Leasehold improvements can include anything from basic remodeling, such as painting, flooring, and partitioning, to more significant upgrades like electrical work or plumbing upgrades that enhance the usability of the space.

Other terms, while related to property, do not fit this specific scenario as precisely. Personal property generally refers to movable items that are not fixed to the property. Chattel is a legal term often used synonymously with personal property, focusing on tangible assets that a person or business owns. Fixed assets are long-term tangible assets owned by a company, such as buildings or machinery, which does not capture the nuance of improvements made by a tenant. Therefore, leasehold improvements is the most correct and specific term in this context.