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Last updated: November 2026
Tenant improvement money, or a TI allowance, is money a landlord contributes to build out or renovate your space, such as walls, flooring, lighting, plumbing or restrooms. You get it by negotiating it in the letter of intent and lease. Landlords usually offer more TI for longer terms and stronger tenants, and they set rules on how it's paid.
If a space needs work to fit your business, TI money can make the difference between a good deal and a stretch. Here's how it works.
This guide is part of our guide to buying or leasing commercial property in Myrtle Beach.
In this guide:
- What does TI money cover?
- How is a TI allowance structured?
- How do you get more TI money?
- How is TI money paid out?
- What should you plan for with build-out on the Grand Strand?
- What mistakes do tenants make with TI?
- Who manages the construction?
- What terms should you know?
- What happens to improvements when you leave?
- What else do people ask about this?
- Ready to talk about commercial space on the Grand Strand?
What does TI money cover?
TI usually covers permanent improvements to the space. Examples include interior walls, ceilings, flooring, lighting, electrical, plumbing, restrooms and HVAC distribution. These improvements usually stay with the building when you leave.
Furniture, equipment, signage and moving costs often aren't covered, though some landlords allow part of the allowance for them. Ask how the lease defines eligible costs.
How is a TI allowance structured?
There are a few common structures.
- Allowance: the landlord pays up to a set amount, and you manage the build-out and pay anything above it.
- Turnkey: the landlord builds the space to an agreed plan and pays for it.
- Rent abatement: instead of cash, the landlord gives you free or reduced rent.
- Amortized TI: the landlord funds extra improvements and you repay them through higher rent.
Allowances are often quoted per square foot. We don't quote typical amounts because they vary by property and market.
How do you get more TI money?
Landlords weigh TI against the value of your lease. You can usually get more with:
- A longer lease term.
- Strong financials or a personal guaranty.
- A space that's been vacant or is hard to lease.
- Improvements that make the space more valuable for future tenants.
Ask for it in the LOI. See what a letter of intent is.
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How is TI money paid out?
Most landlords pay after the work is done, not before. They may require paid invoices, lien waivers from contractors, a certificate of occupancy and proof that you've opened. That means you may need to fund the work up front.
Ask about the timing, the paperwork required and the deadline to use the allowance. Unused TI often goes away.
What should you plan for with build-out on the Grand Strand?
Get real numbers before you sign. Have a contractor walk the space and price your plan during the LOI or due diligence stage. Build-out often needs permits from the city or county, and a change of use can trigger added code work. See what permits you need to open.
Make sure the rent start date gives you enough time to permit, build and open.
What mistakes do tenants make with TI?
The most common one is underestimating build-out costs. If you sign for an allowance before pricing the work, you may find it covers less than you expected. Get a contractor estimate first, including permits, design fees and a contingency for surprises.
Others include not confirming which costs count toward the allowance, missing the deadline to claim it, and not knowing that you'll front the money until the landlord reimburses you. Some tenants also forget that if they leave early, the lease may require them to repay unamortized TI.
Read the work letter, the exhibit that spells out how construction and the allowance work, as closely as the lease itself.
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Who manages the construction?
It depends on the deal. In a turnkey arrangement, the landlord hires the contractor. With an allowance, you usually do, subject to the landlord's approval of plans and contractors. Managing it yourself gives you more control but more responsibility for schedule and cost.
What terms should you know?
- Work letter: The lease exhibit that sets out construction responsibilities, approvals and how the allowance is paid.
- Lien waiver: A document from a contractor confirming they've been paid and won't place a lien on the property.
- Certificate of occupancy: Approval from the building department that a space can be occupied for its intended use.
- Unamortized TI: The portion of improvement money not yet recovered by the landlord through rent, which some leases require you to repay if you leave early.
What happens to improvements when you leave?
Check the restoration clause. Some leases let the landlord require you to remove improvements and return the space to its original condition at your cost. Negotiate this up front. See what happens when a commercial lease ends.
Related guides:
- What Is a Letter of Intent (LOI) in Commercial Real Estate in South Carolina?
- How Long Are Commercial Leases in Myrtle Beach, and Can I Negotiate the Terms?
- What Permits Do I Need to Open a Restaurant or Retail Shop in Myrtle Beach?
- How Do I Buy or Lease Commercial Property in Myrtle Beach?
What else do people ask about this?
What is a TI allowance?
Money a landlord contributes toward building out or renovating your space, negotiated in the lease.
Do I have to pay back TI money?
Usually not if it's a straight allowance, but if you leave early, some leases require repayment of unamortized TI. Amortized TI is repaid through rent.
Can TI money pay for furniture or equipment?
Often not, but some landlords allow part of the allowance for it. Check the lease.
When does the landlord pay TI?
Usually after work is complete and documented with invoices, lien waivers and a certificate of occupancy.
Is turnkey better than an allowance?
Turnkey is simpler, but you have less control over contractors and finishes. An allowance gives you more control and more responsibility.
This article is general information, not legal, tax or financial advice. Rules and requirements change. Talk to a South Carolina attorney, CPA or lender about your situation, and confirm current requirements with the agency involved.
Ready to talk about commercial space on the Grand Strand?
Whether you are leasing your first space, buying a building for your business or adding an investment property, a short call with our team can help you sort out the options and the next steps. No pressure, and no commitment.
