The allowance reimburses defined improvement costs on submission of invoices, lien waivers, and completion evidence. Unused amounts typically expire, and disputes involve eligible costs and disbursement conditions.
Amortization into rent is a common alternative structure.
Alternative Names:
TI Allowance|Build-Out Allowance
Why it Matters?
Disbursement condition failures are the recurring dispute, since allowances typically require lien waivers, certificates of occupancy, and completion documentation that a tenant occupying under time pressure may not assemble before the deadline. Expiration provisions then extinguish the funding. Tracking the documentation requirements from the start of construction rather than at completion is what preserves the allowance.
Frequently Confused with
Related terms
Frequently asked questions
What causes allowance disputes?
What preserves the allowance?
