Recovering tenant improvement allowances you already earned

A tenant improvement allowance is one of the clearest commitments in a lease and one of the most commonly left on the table. The landlord agrees to fund some portion of your build-out, usually against submitted costs and within a deadline. It is money you earned the day you signed. It goes unclaimed not because anyone disputes it, but because no one tracked the conditions and the clock.

This piece covers what a TI allowance actually is, why it lapses, the three numbers you have to track to recover it, and how to do that across a portfolio rather than one lease at a time.

What a tenant improvement allowance actually is#

A TI allowance is the landlord’s contribution toward fitting out your space, set in the lease and usually paid as a reimbursement against documented costs. In accounting terms it is a lease incentive, which matters later. In practical terms it is cash the landlord owes you on conditions you agreed to, and like any conditional payment, it is only paid if you meet the conditions and ask in time.

Why it goes unclaimed: the draw deadline#

The most common reason TIA is forfeited is a missed draw deadline. Leases frequently require that the work be substantially complete and the costs requisitioned by a specified date, after which the right to draw expires and the unused allowance reverts to the landlord. Some leases go further, giving the landlord the right to complete unfinished work and bill the tenant, or leaving room for a dispute over what "substantially complete" even means. The draw deadline is a critical date with a dollar value attached, which is why it belongs in the same inventory as renewal and termination dates.

The three numbers to track#

Recovering TIA comes down to three figures, per lease: what you were entitled to, what you actually collected, and what remains outstanding. The reason this is hard is the same reason most lease work is hard. The allowance terms, the documentation rules, and the deadline live in the lease and its amendments, in different formats across landlords, and the difference between entitled and collected is rarely sitting in any one system. Without that comparison, an unclaimed balance is invisible until the deadline has already passed.

Recovering it across a portfolio#

At scale this is a data exercise, not an accounting afterthought. Abstract the allowance amount, the conditions, and the deadline from every lease. Match each against what was actually collected. Surface the outstanding balance with the deadline and the documentation required to claim it, while there is still time to claim it. REAL abstracts the allowance terms and deadlines from each lease, compares them against what was collected, and flags the outstanding balance with the clause and the deadline attached, so unclaimed TIA surfaces as a recoverable item rather than a missed one.

Where the money shows up after you recover it#

A TI allowance is not only a cash item. As a lease incentive, it reduces the right-of-use asset under ASC 842, so the same allowance that affects your bank balance also affects your lease accounting. Getting the allowance abstracted correctly means it is both recovered as cash and reflected correctly in the books, which is one less source of the surprises that complicate an ASC 842 close. The recovery and the accounting come from the same accurate lease data, the same foundation behind the CAM reconciliation playbook and enforcing co-tenancy clauses.