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Giving tenants construction allowances to make improvements to the property exposes you to legal risks. If the tenant doesn’t pay its contractors, they may try to collect the debt from you, which can include placing a mechanic’s lien on the property. Requiring the tenant to get “lien waivers”—that is, contractual agreements by a contractor to waive its lien rights with regard to the contract work—from its contractors is one way to protect yourself, but lien waivers aren’t allowed in many states.
