A tenant allowance represents a dollar amount provided by the landlord of a commercial property for use by the tenant for the purpose of building / improving the premises.

Generally an allowance is provided to incentify the tenants to lease the premises.

Typically, the allowance could be use for the following expenses:

- initial build-out of the leased premises
- design and architect 's fees
- engineering expenses
- moving expenses

The allowance is usually provided as a flat fee based on the square footage of the leased space.  

Example - $10 psf or $15,000

Once the tenant improvement is completed, the tenant will require the landlord to pay the allowance.

Before the landlord will issue the funds, a diligent landlord will ask for some documents to be provided by the tenant.

The following checklist can be used in this instance:

1) a signed & executed copy of the lease agreement

2) a current tenant's statement  

3) s Statutory declaration stating that the tenant has completed all the work and paid in full all the vendors & contractors

4) copies of all invoices related to the tenant improvement project

5) a lien search completed by the property management team to identify any possible charges on the title

6) a copy of the certificate of insurance for contractor(s)

7) an inspection of the premises to certify the work

8) for new built-outs , a certified BOMA survey;

9) copies of as-built drawings (cad and pdf)

10) copies of all building permits , engineering reports, warranties

Once the documents have been received and verified by the management team, the landlord can release the tenant improvement allowance.

Good luck!
 

eProp Property Experts

Moving forward, together