WHAT IS THE LEASE COMMENCEMENT DATE? | WHAT IS THE RENT COMMENCEMENT DATE?
The Lease Commencement Date usually constitutes the commencement of the term of the lease for all purposes, regardless if the tenant has actually taken possession of the space but so long as beneficial occupancy is possible. In other words, it is when the lease term and benefits of the lease officially commence.
It is important to understand that the Lease Commencement Date may or may not be the same as the Rent Commencement Date and there could be other agreements, such as an Early Occupancy Agreement timeframe to build out the space that is documented separately.
The Rent Commencement Date is the date the tenant begins to pay rent on the space or the date the tenant’s free rent at the beginning of the lease term commences.
Often times a lease will commence with the Lease Commencement Date for the purposes of the space being built out or finished so it can be occupied. Then the lease will have an official Rent Commencement Date when the tenant’s free rent period will start (after the space has been finished and is ready for occupancy) or when the tenant’s first month of rent is officially due.