Your commercial lease contains many dates, and many types of dates. In this brief article we will outline some types of dates, and potential pitfalls that can result in very unpleasant consequences if they are not managed correctly.
The 3 Types of Dates
Life would be simple if all days and dates were the same, but they are not. Your lease probably contains three different types of dates that must be actively managed. They are:
Just as the name implies, these are clearly and specifically spelled out in the lease. For example, June 15, 2019 is a clear and specific date. Unfortunately, specific dates are rare in leases for a host of reasons.
These are dates that are set as a result of an action to be done or as a result of another date. An example of a dependent date may be the ‘Effective Date’ of the lease, and it is typically the day the lease is signed by all parties. The date can’t be known in advance because no one knows when everyone will sign the lease.
These are dates that result in another date. For example, once the landlord turns over the space for the tenant to build-out their space (often called a possession or delivery date), the tenant has “X” number of days to construct the premises before rent starts. The trigger date is the possession or delivery date; which, in turn starts the clock running on the time to build out the space before rent starts.
The issue we frequently see with all these dates is that tenants, and landlords, don’t always keep track of the actions that result in recording the appropriate dates. As a result, and often after some time has passed, people are left wondering if and when an action occurred in order to get the right date. This can result in real problems.
For example, almost all rent commencement and lease term expiry dates are dependent on a previous action, or trigger date. An incorrect rent commencement date can mean you pay too much rent over the term, or an incorrect term expiry date can result in you missing important deadlines during the life of the lease. You can even lose your lease, and your business, because of an incorrect date!
Many times, the dates recorded by the landlord may not be the same as the dates you have. This is inconvenient at best, and could end up in expensive litigation at worst.
There are two remedies to the issues that can arise if all the dates are not confirmed when they should be. The first is to check, and counter check, the dates each party has recorded. In a recent exercise for a client we found that the landlord’s records were incorrect in a third of the surveyed locations. The tenant’s date records were incorrect in over 45% of the locations. Overall, the dates were incorrect 3 out of 4 times. This was a serious issue. Fortunately, we were able to recognize, and correct the errors for our client, and their landlords.
Once the dates have been confirmed then it is important to actively manage them. This is where our lease management system can help you. We manage important lease dates on your behalf for just pennies a day, so you won’t miss an important milestone in the lease. In fact, we manage all the Anytime Fitness corporately owned locations’ lease dates.
Our system sends you up to 5 reminders before an important lease event together with helpful ‘next-steps’ advice.
As a free bonus to you, we retain a copy of your lease and all the amendments you give us, so you have an important back up in case of disaster.
It is SO EASY to start. Simply email us a copy of your lease and all amendments to it to info@CRELeasePros.com. We will then send you a convenient PayPal invoice. We will let you know once we have entered all the lease information into our system. You will then have peace of mind that important dates will not be forgotten or missed.
Just ask if you have a question. Our email is info@CRELeasePros.com