ContractsCounsel Logo

Rent Concession

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 7,612 reviews
Home Blog Rent Concession

Jump to Section

Need help with a Lease Agreement?

Create a free project posting

A rent concession, also known as a lease incentive, is a temporary arrangement between a lessor and a lessee in the context of a lease or rental property. This concession generally involves the lessor offering some form of financial incentive or relief to the lessee, intending to make the rental provisions more profitable during a specific term. In addition, rent concessions are usually used as a means to attract lessees, retain existing ones, or reduce financial burdens during challenging economic situations. This blog post will give a detailed overview of rent concession, its implications, and more.

Pros and Cons of a Rent Concession

In real estate, rent concession is fundamental in providing monetary relief and flexibility to lessees and lessors. Moreover, a rent concession can take different forms, such as decreased rent, waived costs, free utilities, or extended lease duration. While rent concessions may seem like a temporary settlement, they bring about some pros and cons for lessors and tenants that are as follows:


  • Tenant Retention and Attraction: Rent concessions can be a robust tool for attracting new lessees to vacant properties or motivating existing ones to renew their lease agreements. In competitive real estate markets, offering rental concessions can set a property apart, making it more attractive to potential tenants.
  • Faster Occupancy Rates: With rent concessions, landlords can reduce the time their properties remain vacant. By providing discounts or other incentives, landlords can motivate potential tenants to act quickly and secure the property, leading to shorter vacancy periods and a more stable cash flow.
  • Flexibility in Market Adjustments: During economic downturns or low demand, rent concessions allow landlords to adapt to changing market conditions. Instead of reducing the base rent permanently, offering short-term concessions provides a flexible way to adjust rental prices without committing to long-term reductions.
  • Positive Tenant-Landlord Relationship: Rent concessions can foster a positive relationship between landlords and tenants. Providing incentives demonstrates that landlords are willing to work with tenants during challenging times, enhancing trust and goodwill between both parties.
  • Financial Incentive Without Long-Term Impact: By providing a temporary concession, landlords can stimulate demand without sacrificing the long-term value of their properties. Once the concession term ends, lessors can revert to the actual rent amount.


  • Financial Loss for Lessors: Offering rent concessions directly impacts a landlord's earnings. While concessions may lead to higher occupancy rates, the immediate economic loss could be considerable, especially in properties with an extensive number of units or in areas with declining rental demand.
  • Attracting Temporary Tenants: Some tenants may be attracted solely by the rent concession rather than the property's merits, leading to a higher turnover rate. Such transient tenants may leave once the concession ends or when they find another property offering a better deal, resulting in additional expenses associated with finding new lessees.
  • Risk of Setting a Precedent: Rent concessions can set a precedent for future tenants, leading them to expect similar incentives. It can create challenges for landlords who may face pressure to continue offering concessions even when market conditions improve.
  • Potential Equity and Appraisal Issues: Rent concessions might impact the perceived value of a property, potentially leading to lower appraisals or affecting its resale value. Lower rental income due to concessions could also impact the property's financial metrics for potential investors.
  • Complexity in Lease Negotiations: Implementing rent concessions can make lease negotiations more complex and time-consuming. It requires careful documentation and clear communication to avoid misunderstandings or disputes between landlords and tenants.

Types of Rent Concessions

Rent concessions can take many forms, ranging from reduced monthly rent to other amenities or services. Below are the different rent concessions commonly used in the real estate industry.

  • Temporary Rent Reductions: One of the most prevalent types of rent concessions is a temporary reduction in the periodic rental rate. Lessors may offer a discounted rate for a specific period, such as the first month, several months, or throughout a lease. Temporary rent reductions can effectively attract new tenants quickly or retain current tenants during slow rental periods.
  • Free Rent Period: Another common type of rent concession is a "free rent" period, wherein tenants are not required to pay rent for a predetermined period. This concession can span from a few days to a couple of months, providing tenants with financial relief and an incentive to choose the property. Free-rent periods are often offered when properties undergo important renovations or when landlords seek to fill vacant units promptly.
  • Move-In Incentives: Landlords may offer various move-in incentives to encourage prospective tenants to choose their property over competitors. These may include covering moving expenses, providing free furniture, or offering gift cards for local stores. Move-in incentives are especially attractive to tenants relocating or starting fresh in a new area.
  • Amenity Upgrades: Property owners may entice tenants with amenity upgrades as rent concessions. These upgrades involve installing high-speed internet, offering access to premium cable channels, or providing free access to on-site facilities like gyms, pools, or laundry rooms. Such perks can add essential value to the rental experience and justify a higher rent rate.
  • Flexible Lease Terms: Flexibility in lease terms can be a valuable rent concession for tenants who desire shorter or more extended lease durations. Offering month-to-month leases or options to break a lease without certain penalties can attract tenants who may be uncertain about their plans or only need temporary housing.
  • Security Deposit Waivers: Landlords may waive or reduce the security deposit as a rent concession, which reduces the upfront costs for prospective tenants. This can be especially appealing to lessees with restricted funds or those seeking to avoid the hassle of tying up a substantial amount of cash as a deposit.
  • Rent-to-Own Agreements: Rent-to-own agreements are a unique type of rent concession that authorizes lessees to apply a portion of their monthly rent towards the prospective purchase of the property. This concession is directed towards lessees who intend to buy a house eventually but want to try the property and the vicinity before committing to an investment.
Meet some lawyers on our platform

Ryenne S.

439 projects on CC
View Profile

Brian R.

1 project on CC
View Profile

Connie C.

8 projects on CC
View Profile

Nicholas M.

9 projects on CC
View Profile

Key Terms for Rent Concessions

  • Rent Deferral: Agreement allowing tenants to delay rent payments to a later date, often with accrued interest or extended lease terms.
  • Amortization: Gradual repayment of rent concessions over time, often added to regular rental payments to spread the financial impact.
  • Gross Lease: A rental agreement where the tenant pays a fixed rent amount, and the landlord covers operating expenses and property taxes, reducing the need for rent concessions.
  • Net Lease: Tenant responsible for paying rent and a portion of operating expenses and taxes, affecting the potential for rent concessions.
  • Force Majeure: Contractual clause protecting parties from fulfilling obligations, including rent payments, in the event of unforeseen circumstances, such as natural disasters or emergencies.
  • Tenant Improvement Allowance: Concession where landlords provide funds for tenants to improve or customize the leased space.
  • Rental Concession Period: Specific timeframe during which rent concessions are valid, after which the standard rent terms apply.
  • Occupancy Cost: Total cost of occupying a property, including base rent and any rent concessions, influencing tenants' overall financial burden.
  • Vacancy Concession: Rent discounts are provided to new tenants to attract them to lease a property that has been vacant for an extended period.
  • Market Conditions: Economic factors impacting the real estate market and influencing the prevalence and magnitude of rent concessions.
  • Lease Buyout: An agreement where tenants pay a lump sum to end the lease early, potentially affecting the extent of rent concessions.
  • Concession Recovery Plan: Landlord's strategy for gradually phasing out rent concessions and returning to standard rental rates after challenging periods.

Final Thoughts on Rent Concessions

Rent concession is a useful tool lessors use to attract lessees, fill vacancies, and maintain favorable landlord-tenant associations. Understanding the implications and advantages of rent concessions for lessees can help them make informed choices and negotiate contracts that best suit their requirements. As with any rental contract, clear communication and transparency between lessors and lessees are key to a successful and mutually advantageous lease contract.

If you want free pricing proposals from vetted lawyers that are 60% less than typical law firms, click here to get started. By comparing multiple proposals for free, you can save the time and stress of finding a quality lawyer for your business needs.

Need help with a
Lease Agreement?

Create a free project posting

Meet some of our Lawyers

Ryenne S. on ContractsCounsel
View Ryenne
4.9 (256)
Member Since:
October 11, 2022

Ryenne S.

Principal Attorney
Free Consultation
Chicago, IL
13 Yrs Experience
Licensed in IL
DePaul University College of Law

My name is Ryenne Shaw and I help business owners build businesses that operate as assets instead of liabilities, increase in value over time and build wealth. My areas of expertise include corporate formation and business structure, contract law, employment/labor law, business risk and compliance and intellectual property. I also serve as outside general counsel to several businesses across various industries nationally. I spent most of my early legal career assisting C.E.O.s, General Counsel, and in-house legal counsel of both large and smaller corporations in minimizing liability, protecting business assets and maximizing profits. While working with many of these entities, I realized that smaller entities are often underserved. I saw that smaller business owners weren’t receiving the same level of legal support larger corporations relied upon to grow and sustain. I knew this was a major contributor to the ceiling that most small businesses hit before they’ve even scratched the surface of their potential. And I knew at that moment that all of this lack of knowledge and support was creating a huge wealth gap. After over ten years of legal experience, I started my law firm to provide the legal support small to mid-sized business owners and entrepreneurs need to grow and protect their brands, businesses, and assets. I have a passion for helping small to mid-sized businesses and startups grow into wealth-building assets by leveraging the same legal strategies large corporations have used for years to create real wealth. I enjoy connecting with my clients, learning about their visions and identifying ways to protect and maximize the reach, value and impact of their businesses. I am a strong legal writer with extensive litigation experience, including both federal and state (and administratively), which brings another element to every contract I prepare and the overall counsel and value I provide. Some of my recent projects include: - Negotiating & Drafting Commercial Lease Agreements - Drafting Trademark Licensing Agreements - Drafting Ambassador and Influencer Agreements - Drafting Collaboration Agreements - Drafting Service Agreements for service-providers, coaches and consultants - Drafting Master Service Agreements and SOWs - Drafting Terms of Service and Privacy Policies - Preparing policies and procedures for businesses in highly regulated industries - Drafting Employee Handbooks, Standard Operations and Procedures (SOPs) manuals, employment agreements - Creating Employer-employee infrastructure to ensure business compliance with employment and labor laws - Drafting Independent Contractor Agreements and Non-Disclosure/Non-Competition/Non-Solicitation Agreements - Conducting Federal Trademark Searches and filing trademark applications - Preparing Trademark Opinion Letters after conducting appropriate legal research - Drafting Letters of Opinion for Small Business Loans - Drafting and Responding to Cease and Desist Letters I service clients throughout the United States across a broad range of industries.

Briana C. on ContractsCounsel
View Briana
5.0 (50)
Member Since:
February 15, 2021

Briana C.

Founder, Branch Legal LLC
Free Consultation
Boston, MA
11 Yrs Experience
Licensed in CA, MA, NY
Columbia University School of Law

Legal services cost too much, and are often of low quality. I have devoted my law practice to providing the best work at the most affordable price—in everything from defending small businesses against patent trolls to advising multinational corporations on regulatory compliance to steering couples through a divorce.

Bruce B. on ContractsCounsel
View Bruce
5.0 (13)
Member Since:
January 11, 2022

Bruce B.

Managing Attorney
Free Consultation
Tampa, FL
8 Yrs Experience
Licensed in FL
University of South Carolina

Bruce Burk practice is in the area of small business, labor and employment, contracts, real estate and civil litigation. Bruce has litigated over 40 trials as well as many appeals. He prioritizes client communication and satisfaction as well as delivering high quality work product.

Garrett M. on ContractsCounsel
View Garrett
5.0 (7)
Member Since:
August 30, 2021

Garrett M.

Free Consultation
Dexter, MO
7 Yrs Experience
Licensed in TX
University of Texas

Hello! I am a young attorney with four years' experience in real estate transactions, fund formation, and general corporate transactional work. I graduated in 2016 from the University of Texas - Austin and I am barred in Texas.

Billy Joe M. on ContractsCounsel
View Billy Joe
5.0 (3)
Member Since:
October 26, 2021

Billy Joe M.

Partner Attorney
Free Consultation
Chicago, IL
14 Yrs Experience
Licensed in IL
University of Illinois at Urbana-Champaign

I graduated from the University of Illinois at Urbana-Champaign in 2006 with a degree in Political Science, Finance, and Economics. I stayed around Champaign for law school and graduated in 2009. I then worked at a big law firm in downtown Chicago. It was boring, so I quit in early 2011. I thought that I could not be happy practicing law - I was wrong. After I quit the traditional law firm life, I began representing my own clients. I realize now that I love helping normal people, small business owners, and non-profits address a variety of legal issues. I hope to hear from you.

James David W. on ContractsCounsel
View James David
Member Since:
September 3, 2021

James David W.

Free Consultation
Raleigh, NC
7 Yrs Experience
Licensed in DC, NC
Harvard Law School

I graduated from Harvard Law School and worked first for a federal judge and then a leading DC firm before starting a firm with a law school classmate. My practice focuses on company formations, early-stage investments, and mergers & acquisitions.

Anna K. on ContractsCounsel
View Anna
Member Since:
November 12, 2021

Anna K.

Free Consultation
Miami, Florida
25 Yrs Experience
Licensed in FL
University of Miami

Anna is an experienced attorney, with over twenty years of experience. With no geographical boundaries confining her practice, Anna works on corporate, healthcare and real estate transactions. Anna brings extensive big firm experience, garnered as an associate in the Miami office of the world's largest law firm, Baker and McKenzie, and the Miami office of the international law firm Kilpatrick Townsend. Her areas of expertise include: mergers and acquisitions, initial public offerings, private placements, healthcare transactions, corporate finance, commercial real estate transaction and acting as a general corporate counsel. Anna is certified to practice law in Florida and was admitted to the Florida Bar in 1998. Anna is also a Certified Public Accountant. She passed May 1995 CPA Exam on the first sitting. She is fluent in Russian (native).

Find the best lawyer for your project

Browse Lawyers Now
Learn About Contracts
See More Contracts
other helpful articles

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

View Trustpilot Review

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

View Trustpilot Review

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

View Trustpilot Review

Need help with a Lease Agreement?

Create a free project posting

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city