Define Commencement Date: Everything You Need to Know
A commencement date typically comes with a project schedule, which outlines when materials will be delivered as well as when phases of the project will be done.3 min read
If you want to define commencement date, it is a specific date when something is set to take place, such as a commercial construction project. A commencement date typically comes with a project schedule, which outlines when project materials are to be delivered as well as when certain phases of the project will be carried out. Most project schedules will also include an occupancy date, which is the date the project is supposed to be completed.
Understanding Commencement of Construction
It is important to understand that a construction project's commencement date is not the date construction will begin. Often, other scheduled activities must take place before construction can start. The construction contract will outline these activities. More so, a Notice to Proceed, which is usually delivered in-hand, does not set into place any type of legal binding for a contractor. A commencement of construction simply outlines the physical nature of the construction activities and services to be rendered.
Understanding Rent Commencement Date
A rent commencement date is one in which the landlord and tenants have a right to start their activities under the lease they sign, such as moving into the new construction.
A commercial lease commencement date, or a rent commencement date, is the date a renter becomes responsible for paying his or her landlord for use of the space being rented or leased. In many cases, a rent commencement date is affected by the completion of certain improvement projects. For example, a renter might receive a lease commencement date contingent upon a plumbing issue that must be fixed before the lease can begin.
In addition to a lease commencement date, many contracts outline a move-in date. This refers to the date a tenant can move into the property and start occupying the space. Many times, this date will not correspond to the lease commencement date.
Understanding Full Calendar Months
On a contract's expiration date, the agreement between the parties involved in the lease end. To simplify lease term expiration dates, many contracts will outline their duration according to full calendar months. For example, if a 60-month lease is set to start on Dec. 2, 2014, it will not end until Dec. 31, 2019. Because the expiration date is often calculated according to the lease effective date instead of the rent commencement date, it can be very confusing and difficult to understand lease term expiration dates.
Regardless of which terms are used and how lease term expiration dates are calculated, a commencement letter will determine the official beginning of the agreement being made. Generally, this letter is one page and outlines the detailed definitions of all terms being used.
Understanding a Notice of Commencement
- A Notice of Commencement can help clarify when a construction project will begin.
- This document will clearly outline when the project is set to start and can affect preliminary notices as well as deadlines for subcontractors and others in the contracting chain.
- Depending on where the project takes place, a Notice of Commencement might be required by law. Some states require them, whereas others do not.
- A Notice of Commencement is generally filed either before or very shortly after labor or materials for a project have been acquired.
- Because filing requirements vary between states, it is important for contractors to understand the legalities of the state and city in which they are carrying out the project. In most cases, however, state law requires a Notice of Commencement to be posted on the project site and officially recorded with the county.
When Does a Contract Start?
Some contracts clearly state when they will become effective. Many times, the contract starts when it is signed by all parties involved. If there is no effective date, then it will start the moment it is signed by the party to whom it is being offered. If there is no date stating when the person signed the contract, then its effectiveness starts the moment it leaves the person's hands after being signed. If a contract states a specific start date, then regardless of whether there are dates outlined by the parties' signatures, the contract will be effective on its designated start date.
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