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.
eProp Property Experts
Moving forward, together
Leave a Reply