Lease commencement vs. rent commencement: build the right timeline

Lease commencement, possession, rent commencement, and business opening can be different events. Each should have its own definition, trigger, and source reference. Free rent may suspend only specified charges for a defined period; it does not automatically postpone every obligation in the lease.

Start with a timeline of the actual wording. Do not substitute the expected opening date for a contractual event simply because it is the date the business team remembers.

Put four events on separate lines

• Possession or access: when the tenant can enter and for what purpose.
• Lease commencement: when the contractual term begins under its definition.
• Rent commencement: when the identified payment obligation starts.
• Opening: when the business expects, or is required, to begin operating.

For each event, record the trigger, conditions, responsible party, evidence, and consequences of delay. Early access for measurements may have different conditions from possession for construction. A planned calendar date is not proof that delivery occurred.

An illustrative timeline

Assume a hypothetical lease starts on January 1, permits construction from that day, starts base rent on April 1, and expires December 31 five years later. Assume operating expenses of $1,500 monthly begin January 1 and base rent is $6,000 monthly starting April 1.

The January-through-March base-rent payment is zero, but the assumed operating-expense total is $4,500. April's combined assumed payment is $7,500. Utilities, deposits, insurance, and other charges are excluded from this example.

Now change one fact: construction finishes in May. Under these assumptions, April base rent still starts on April 1 unless another provision changes that outcome. This is why the review needs the trigger and delay provisions, not only a label saying “three months free.”

Check what the abatement actually covers

Record the start, end, covered charges, and conditions of each concession. Then compare the dates with the rent schedule and work letter. Ask whether the stated period falls inside the lease term or changes the term calculation.

The American Bar Association's discussion of rent commencement and abatement explains why delivery timing and default-related conditions deserve separate attention. Your review should quote the specific language instead of assuming the same treatment in every lease.

Turn event-based dates into verified calendar dates

If a date depends on delivery, completion, or another event, mark it as provisional until supporting evidence is available. Keep the delivery notice, certificate, or written confirmation with the abstract. Ask the responsible reviewer to confirm that the event satisfies the contractual definition.

Check related dates after confirmation: first payment, first escalation, allowance submission, expiration, and renewal notice. A corrected commencement date can require several calendar updates. Keep the old calculation in the history so a teammate can understand the change.

Questions to resolve before signing

What condition must the premises be in at delivery? Who records that condition? Which payments begin before opening? How are partial months handled? What happens if landlord work, permits, or tenant work runs late? Which document controls if a certificate conflicts with the lease?

Use the lease abstract worksheet to assign owners to these answers. For comparing offers after the timeline is clear, use the effective rent calculation.