The Lease Year: Let's Keep It Simple

The date that a lease begins, which is usually called either the “commencement date” or the “effective date,” is an extremely important lease term. It signifies the date when many lease obligations begin and can be a benchmark used for determining not only a lease's expiration date, but also other key lease dates. For many leases, the commencement date starts on the first day of the month. For ease in bookkeeping, this is the simplest approach. But life is not always so simple, especially where the parties want the lease term to begin on some date other than the first day of a month. For example, many leases state that the “commencement date” is a specified number of days after a landlord has notified a tenant that it is ready to deliver the demised premises (usually after certain itemized “landlord's work” is substantially completed). The beginning of the lease term would thus be a “moving target,” i.e., the commencement date could easily start somewhere in the middle of a month ' or at any time during the month.