Letter of Intent / Commencement Dates
The Letter of Intent (LOI) or proposal should include at the very least the following information in the sections related to Commencement Dates.
- Specify the term of the lease (e.g. 5 years and six months).
- Lease Commencement Date: This date may be different than the date the lease is executed. For example the lease is executed February 23 of 2009 but the Lease Commencement Date is September 1, 2009.
- Rent Commencement Date: The Lease and Rent Commencement Dates are different when the landlord give the tenant “free rent’ in increments of whole months. In the above example if the tenant has two months free rent then the Rent Commencement Date would November 1, 2009. Landlords sometimes like to give 1/2 month free rent instead of a whole month free rent. The landlord above could have offered four months free rent at 1/2 rent.
- The Lease Commencement Date may be triggered by “Substantial Completion” of construction of the Premises, obtaining a certificate of occupancy, completion of installation of tenant’s signage, building systems are operational or any number of other triggers.
- Tenants should match the expiration of the term of their existing lease with the Lease Commencement of the new lease.
- The Lease or Rent Commencement Dates should start on a business day, preferably a Monday, and not a Friday.
- In in separate section of the LOI there should be a section titled “Access to Premises”. The tenant should have access to the premises before the construction is completed (Search “Access to Premises”).
- Most tenants schedule the move into their new space over a weekend so they can use as many elevators as possible and not interrupt the other tenants in the building (Search “Moving”)
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