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12/21/2025

Rent Commencement: Don’t Pay Before You Can Open

Rent Commencement: Don’t Pay Before You Can Open

One of the most common tenant complaints is paying rent while the space is still unusable:

  • buildout isn’t finished
  • the landlord’s work isn’t done
  • permits or inspections are delayed
  • the space isn’t delivered in the condition promised

This happens because many leases set rent commencement on a fixed date that has nothing to do with your ability to open.

This guide explains common rent commencement structures and what tenants negotiate to protect their opening timeline. (Not legal advice.)

What “rent commencement” really means

Rent commencement is the date you start paying rent—often including:

  • base rent
  • additional rent/CAM
  • sometimes utilities or other charges

If you’re doing tenant improvements (TI), rent commencement should align with usable premises, not paper delivery.

Common rent commencement models

1) Fixed date (worst for tenants)

Rent starts on a calendar date regardless of delivery condition.

2) Delivery-based

Rent starts when the landlord “delivers” the premises—but delivery must be defined.

3) Substantial completion / opening-ready

Rent starts when:

  • landlord work is complete
  • your buildout is substantially complete
  • required approvals are obtained (CO/permits if applicable)

This is often the most tenant-aligned approach.

The delivery condition trap

“Delivery” can be vague. Tenants should clarify:

  • Is the space delivered as-is, or with landlord work completed?
  • Are HVAC, plumbing, electrical, and roof in working order?
  • Are there code issues the landlord must correct?

If you take the space “as-is,” you need strong protections in your buildout schedule and rent start.

Permit / inspection / CO timing

If your use requires permits, inspections, or a certificate of occupancy (CO), consider a contingency:

  • If approvals are not obtained by a deadline, tenant can delay rent start or terminate.

Even if you don’t want termination language, you want the right to avoid paying full rent during delays outside your control.

Practical protections tenants negotiate

1) Clear definition of “usable premises”

Tie rent start to objective conditions:

  • landlord work complete
  • utilities available
  • safe access
  • space fit for buildout

2) Delay remedies

If landlord is late:

  • free rent days
  • rent abatement
  • termination right after an extended delay

3) Phased rent

For buildout-heavy projects:

  • reduced rent during construction
  • full rent after opening

4) Holdover protection

If your current lease ends and the new lease is delayed, you need a plan:

  • extension options
  • coordination between landlords

How BizLeaseCheck helps

BizLeaseCheck flags rent commencement language and related clauses like:

  • delivery condition and landlord work
  • TI/work letter dependencies
  • default triggers tied to opening delays

Upload a lease for a fast first-pass review:

  • /analyze

Not legal advice

This article is for informational purposes only and is not legal advice. Lease delivery standards and permitting requirements vary by property and jurisdiction. Use this as a checklist and confirm key terms with qualified professionals.