Building Better Leases Series – Term and Early Possession

Building Better Leases

The term refers to the period of time starting with the Commencement Date and ending with the Expiration date. It does not include any “Early Possession” period.

Other terms included may be:

  • Extension – moving the termination date of the current lease, typically for another full term
  • Renewal – starting a new lease upon the expiration of the current lease
  • Lease-to-own – methods by which a Lessee can purchase the leased property

The purpose of this section is to clearly state the period of time the lease is in effect. If the term is too vague (i.e. “one year”), the lease can be deemed unenforceable and merely a “tenancy at will” meaning the lease is only valid from month to month, and can be terminated at any time by either the tenant or landlord.

Early Possession is when the Lessee has the opportunity to occupy the Premises without the obligation to pay Base Rent. During this period, all of the other terms and conditions of the Lease remain in effect; this may include charges such as Real Property Taxes and insurance. If Early Possession is granted to a Lessee, then under normal circumstances, the obligations to begin paying Base Rent will start on the Commencement Date set forth in the lease.

Typically, Early Possession arises when a Lessee’s previous lease has expired. Instead of moving into a temporary place for a few weeks or months, the Lessee will request to move into their new Premises earlier so that they don’t have to move between different spaces during a short period of time.