Question 1

What is the difference between lease commencement and rent commencement in Florida?

Accepted Answer

Distinct dates: the lease commencement date is the date the lease term begins and the tenant takes possession of the premises. The rent commencement date is the date the tenant’s obligation to pay rent begins. These dates are often different because: the landlord may grant a rent-free period (free rent) to allow the tenant to build out the space, the tenant may need time to obtain permits, complete construction, and open for business, and the lease term starts when the tenant takes possession (for liability and insurance purposes) even though rent does not begin until later. Example: a retail tenant signs a 10-year lease with a 3-month rent-free build-out period. Lease commencement: January 1 (tenant takes possession and begins construction). Rent commencement: April 1 (tenant begins paying rent).

Question 2

How are rent-free periods structured in Florida commercial leases?

Accepted Answer

Structures: abated rent (the tenant’s rent obligation is abated for a specified period; the rent is "forgiven," not deferred), deferred rent (the tenant’s rent obligation is deferred; the free rent period amount is spread over the remaining lease term), graduated rent (the rent starts at a reduced rate and increases over time to the full rate), and build-out period (the rent-free period is specifically tied to the time needed to complete tenant improvements). Key considerations: during the rent-free period, the tenant is still responsible for: utilities, insurance, and maintenance (unless the lease provides otherwise). If the tenant defaults during the lease term, the landlord may "recapture" the free rent (the lease may provide that the abated rent becomes due upon default).

Question 3

What triggers rent commencement in a Florida commercial lease?

Accepted Answer

Common triggers: a fixed date (rent commences on April 1, regardless of other events), completion of landlord’s work (rent commences when the landlord delivers the premises with all required improvements), certificate of occupancy (rent commences when the local government issues a certificate of occupancy for the tenant’s build-out), opening for business (rent commences when the tenant opens for business to the public), or a fixed number of days after a triggering event (rent commences 90 days after lease commencement or delivery of premises, whichever is later). The trigger should be clearly defined in the lease to avoid disputes. If the landlord delays delivering the premises, the rent commencement date should be delayed correspondingly.

Lease Commencement vs. Rent Commencement

Lease Commencement vs. Rent Commencement in Florida

Key Distinction

Rent-Free Period Structures

Rent Commencement Triggers

Related Terms

Barnes Walker Commercial Leasing

Ready to Get Started?