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Fixturing and Rent Abatement

Posted by Capital Retail on December 3, 2018
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Fixturing period and rent abatement are terms used in the process of negotiating commercial leases that are often misunderstood. The intent of the fixturing period is to provide the tenant a time period to have access to the space and complete the construction of the tenant improvements also known as fixturing the premises.  The landlord expects the fixturing period to be the period  which Tenant is obligated to fixture and equip the Premises in accordance with the plans they have submitted and received approval for by the Landlord. Tenants can be found in default if they fail to commence business soon after the end of the fixturing period. Typically tenants must start their business and be in open to the public between 30 and 60 days after the end of the Fixturing Period. Typically the Rent Commencement Date is the next day after the last day of the Fixturing period. The rent commencement date is defined as the Tenant’s obligations to pay monthly Minimum Rent and Monthly Common Area Maintenance Charges. Keep in mind the rent commencement date triggers the rental abatement period if there is any given to a tenant. For example, typical rental abatement period language  would be similar to “Notwithstanding the foregoing, provided Tenant is not in default under this Lease, there shall be abated fifty percent (50%) of the installments of Minimum Rent payable during the first ninety (90) calendar days of the Term after the Rental Commencement Date. ” It’s important to negotiate both a fixturing period and rent abatement period. 

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