Posted by Thomas Mote, CPM on February 18, 2004 at 23:45:30:
This is entirely up to you. In the minds of most tenants, when they think of free rent period during buildout, they assume free opex unless this is called out. It is always appropriate to point back to the lease, and if it does not say free opex, then its not free because you have already said so otherwise in the lease.
Warning note: This message will not be well received by your tenant. Some LL’s are VERY aggressive and don’t care, and will hit a tenant over the head with the lease whenever they feel the need to do so. My personal feeling is this is short-sighted, and the wrong way to start ANY business relationship. Technically, you cannot charge them anything until the rent commencement date, so clarify that rent and opex start at the same time.
You are using a Commencement Letter, I hope? If not, I can send one your way that gets the tenant to agree to the date the lease commences (start/expiration) if it slips from the date in the lease for whatever mutually agreed upon reason.
Let me know if I can help.
Tom Mote
Austin, Texas