When a severe loss strikes and damages commercial property, the financial impact extends far beyond physical repairs. Extending support during hardship is a vital part of maintaining tenant relationships and community trust. That often means giving tenant concessions such as rent abatements, deferrals, or prorated discounts, to help tenants recover, stay operational, and manage the inconvenience of property restoration efforts or displacements. However, concessions offered without a clear strategy or proper documentation can create complications for insurance claims, financial reporting, and future lease administration. This guide outlines the types of concessions commonly offered after a property loss, the risks involved, and practical steps to ensure compliance and defensibility during the claims process.

1.     Align Concession Strategy with Insurance Early

Before extending any concessions to tenants, it’s essential to align internally, with insurance advisors, and Valiont. This means clarifying:

• Which concessions may be covered under your policy.

• How each concession relates to the loss.

• What documentation is needed to support recovery – such as unit ledgers, lease amendments, or proof of tenant communications with impacted units.

Aligning a concession strategy helps with a smoother process for recovering costs while minimizing risks and confusion down the line.

2.     Common Types of Post-Loss Concessions

• Inconvenience Concessions - Offered in response to temporary disruptions such as reduced access, limited functionality, or presence of equipment (e.g., dryers, fans) during repairs.

• Construction Concessions - Offered when ongoing work impacts the tenant’s ability to fully use their space or community spaces.

• Financial Concessions - Includes rent abatements, deferrals, or prorated rent discounts used to retain tenants or ease operational burden.

Each type of concession must be handled with care, particularly when there is an intent to include these amounts in an insurance claim.

3.     Avoid Double Claiming

Double claiming occurs when a concession is financially recovered in more than one form, often unintentionally. This can occur in the following scenarios:

• Concessions recorded on tenant ledgers and simultaneously claimed as, for example, hotel expenses on a separate hotel schedule.

• Concessions recorded on tenant ledgers and simultaneously claimed through lost rent analysis, for example.

To prevent this, maintain separate documentation for each concession type such as detailed ledgers for rent abatements or inconvenience, in addition to supporting documentation for hotel receipts or lost rents resulting from the loss event. Clearly categorizing concessions supports transparency and prevents double claiming during the claim process.

4.     Exercise Reasonableness

Insurers and Adjusters typically apply a reasonableness standard when evaluating tenant concessions. Consider:

• Was the concession necessary, proportional, and within the date of loss?

• Would a similarly situated landlord have offered it under the same conditions?

• Was it supported by direct operational impact (e.g., equipment in unit, no elevator access, construction blocking entry)?

5.     Maintain Proof of Incurred Costs and Documentation

Documentation is essential for any concession you intend to include in a claim. This includes:

• Copies of resident ledgers with detailed concessions listed.

• Copies of lease amendments or written agreements with tenants.

• Communications justifying the concession (e.g., emails).

• Restoration or construction schedules that support the timing and nature of the impact.

Without solid supporting evidence, concessions are unlikely to withstand claim review.

6.     Use a Structured, Systematic Approach

Making concession decisions reactively – especially during a high-pressure recovery period can lead to inconsistencies, errors, or missed documentation. A structured approach should include:

• Clear criteria for when concessions are appropriate.

• Consistency in how concessions are applied across all units and tenants.

• Establish internal approval procedures.

• Ensure that concessions correlate to post-loss dates, with clear documentation of the timeframe from offering concessions.

• Centralized tracking of concessions offered, including dates, tenants, units, and reasons.

• Regular coordination with insurance, legal, and finance teams.

• Rely on your forensic accountants and insurance handling teams to prepare and present fully supported documentation packages to Insurance.

A uniform process increases transparency and reduces the risk of disputes during audits or claim reviews.

Final Insights

Concessions should be strategic, not reactive. Align with insurance and your insurance handling teams on what’s claimable and covered by the policy before offering tenant relief. Use a reasonableness lens to evaluate necessity and scope. Maintain strong documentation to support financial recovery. Ensure concessions are within a reasonable timeframe post-loss and all concessions posted relate to any tenant inconveniences. Avoid double claiming by tracking how each loss-related cost is treated.

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This blog is for informational purposes only and does not constitute legal, financial, or insurance advice. Cara Solutions DBA VALIONT makes no representations or warranties as to the completeness or accuracy of the information provided. Always consult your legal, insurance, or financial experts before making decisions.