TERM OF LEASE - Understanding Commercial Leases - Part 4

This is Part 4 of a Multi-Part series on Understanding Commercial Leases

TERM OF LEASE

COMMENCEMENT DATE - Date the lease period begins and usually when Tenant starts paying rent although Tenant is frequently allowed to use premises before commencement date

TERMINATION DATE - Date when Tenant’s right to use premises ends and they must move out or usually face penalties

LANDLORD'S INTEREST

• Setting commencement date as early as possible to start receiving rent as quickly as possible.
• Making sure date is a specific date, to avoid future uncertainty as to term of lease.      RECOMMENDATION - Send out a letter after occupancy to confirm dates, IN WRITING.
• Making sure there are penalties for “holding over” beyond  termination date.

TENANT'S INTEREST

• Making sure lease is not too long or too short.
• Getting options to extend and making sure the penalties for “holding over” are reduced.