| name | build-out-allowance-agreement |
| title | Build-Out Allowance Agreement |
| description | Drafts a Build-Out Allowance Agreement as a commercial lease addendum governing landlord-provided TI allowance terms. Use when structuring TI allowance financing, negotiating landlord work letters, or documenting tenant improvement funds at lease execution. |
| author | CaseMark |
| author_url | https://github.com/CaseMark/skills/tree/main/skills/legal/build-out-allowance-agreement |
| license | Apache-2.0 |
| version | 0.1.0 |
| execution_mode | open |
| jurisdiction | us |
| practice | real-estate |
| language | en |
| tags | ["agreement","drafting","transactional"] |
Build-Out Allowance Agreement
Lease addendum governing landlord-funded tenant improvements — protects landlord against mechanic's liens and cost overruns while giving tenant clear disbursement procedures.
Prerequisites
Gather before drafting:
- Executed lease (or near-final draft) with premises address, suite/unit, commencement date, SF
- Allowance amount — lump sum or per-SF rate; disposition of unused funds (forfeit vs. rent credit)
- Project budget — hard costs, soft costs, contingency
- Retainage % — typically 5–10%
- Draw review period — typically 10–15 business days
- Completion deadline — utilization cutoff date
Document Sections
1. Recitals & Integration
- Full legal names, lease execution date, premises address
- Agreement supplements the Lease; conflicts resolved in favor of this Agreement
2. Allowance Amount & Scope
| Item | Detail |
|---|
| Total Allowance | [$ AMOUNT] lump sum or [$X/SF × _____ RSF] |
| Unused Funds | Forfeited / rent credit (select one) |
| Utilization Deadline | [DATE] months after Commencement Date |
Reimbursable: hard construction costs, architect/engineer fees, permits, inspection fees, project management (if agreed).
Excluded (Tenant's expense): FF&E, trade fixtures, telecom/AV/security, specialty items unique to Tenant's operations.
3. Construction Approval & Management
- Tenant manages build-out; Landlord retains approval rights (not unreasonably withheld)
- Tenant submits stamped plans from licensed architect/engineer for prior written approval
- All contractors subject to Landlord approval; must name Landlord as additional insured
- Tenant obtains all permits before work commences
- Comply with building codes, ADA, Landlord's building standards, approved plans
- Construction limited to approved hours; minimize disruption to other occupants
4. Disbursement Procedure
Each draw request requires:
- Detailed contractor invoices (labor + materials)
- Conditional lien waivers from all contractors, subs, and suppliers
