Part 7*: When does the “rent commencement date” occur in a commercial lease?

The rent commencement date may or may not align with the commencement date in a commercial lease. In some cases, the Tenant’s obligation to pay rent will begin immediately upon full execution. In other cases, the Landlord may offer “free rent” in which case the lease will state that the rent payments shall begin a certain number of days or months after the lease is executed. Note that the Tenant may still be responsible for additional rent during the free rent period. The rent commencement date may also be linked to substantial completion of Landlord’s work, Landlord’s closing out any open permits or violations, deliver of an ACP-5 or delivery of a subordination and non-disturbance agreement. For obvious reasons, the rent commencement date is often scrutinized and negotiated between the parties.

*Thank you for taking the time to read this article. This article is part of our “Commercial Leasing for Non-Lawyers,” a Blog Series on Commercial Leasing. Other aspects of commercial leasing transactions in New York are discussed in other Parts of this series.

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