The Letter of intent(LOI) is the most common document used by commercial agents and landlords to negotiate the business terms for leasing space. At a minimum the following dates should be defined and included in the LOI. Lease Commencement, Rent Commencement, Possesion and Delivery. Delivery Dates can be further defined and include Estimated or Anticipated Delivery, and Outside Delivery Date. Often dates related to possession, lease commencement, and rent commencement and can get complicated to understand and track. We recommend using an date calculator such as
Examples of how such dates are calculated vary based on the LOI but are often defined and determined by the Landlord.
- Lease Commencement Date: The Lease Commencement Date shall be the earlier of a) the date Tenant commences beneficial use of the Premises,(b) two hundred ten (210) days after the later of (i) the date Landlord delivers the Premises to Tenant with the Retail Shell Condition described in Exhibit complete (but for Punchlist Items, as defined below) (the “Delivery Date”), or (ii) the date the Permits are issued, or (c) two hundred forty (240) days after the Delivery Date.
- Anticipated Delivery Date: The sixtieth (60th) day following the Effective Date (as defined in Section 12.3).
- Rent Commencement Date:The later of: (i) (140) days following Landlord’s delivery of the Premises and Tenant’s receipt of its building permit, which Tenant shall diligently pursue (timeline for submission of plans and response to municipal permitting agency to be more specifically defined in lease); or (ii) Tenant’s opening for business to the public, but in no event greater than one hundred eighty (180) days following Landlord’s delivery of Premises to Tenant.
- Construction Documents Submission Date: Tenant shall cause the Leasehold Architect and the Leasehold Engineer to prepare final construction documents (“Construction Documents”) for the Tenant Improvements, in form approved by Tenant, for submission to Landlord for its approval (“Construction Documents Submission Date”).
After all the key terms are agreed upon by both retailer and landlord, an attorney will create the lease and incorporate the business terms from the LOI. Tenants need to fully understand all of the key terms noted in the LOI.
- Expiration Date: The last day of the tenth (10th) Lease Year.
Some Landlorrds will ask the retail Tenant to sign a verification letter so they understand and agree to the date.
Upon Landlord’s delivery of possession of the Premises, Tenant shall be deemed to have accepted any Landlord’s Work as satisfactory. Promptly after the Term(same thing as “Lease”) Commencement Date and Rent Commencement Date are ascertained, if requested by Landlord, Tenant shall execute a Verification Letter in the form attached hereto as Exhibit F setting forth the Term Commencement Date, the Rent Commencement Date and the date upon which the initial term of this Lease will expire.
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