What Is a Tenant Allowance

Tenant allowances are similar to a loan that the landlord agrees to provide as part of a lease agreement. … The tenant repays the principal (and imputed interest) as part of rent usually over a specified amount of time that could be equal to or less than the lease term.

What do tenant allowances mean?

In a leasing context, a specified dollar amount provided by the landlord for use by the tenant for a specific purpose. … A tenant allowance is used by the tenant for the typical expenses it incurs at the beginning of its lease, such as: Construction costs for the initial build-out of the leased premises.

What does build out allowance mean?

Building Standard Allowance, or “Build-Out” In this arrangement, the landlord offers you a specified package of improvements and you pay for anything fancier or additional, which puts the risk of overruns on the landlord unless you change the agreed upon improvements.