Agreements for lease with development obligations—completion
Agreements for lease with development obligations—completion

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Agreements for lease with development obligations—completion
  • Rent commencement date
  • Developer's compliance with obligations
  • Tenant's works
  • Payments on completion

Rent commencement date

Agreements for lease generally specify that the tenant is obliged to take the lease on, or within a short period after, certification of practical completion. Developers argue that the rent commencement date should be referable to the date on which the tenant is due to complete the lease, rather than the date on which the lease is actually completed (subject to any rent free period). However, from the tenant's perspective, it is important that the parties fix the date from which any rent free period is calculated because the rent commencement date will be at the end of any rent free period. The date from which the rent free period commences could be the date on which the developer can call for completion of the lease, or it could be some earlier date (eg when the tenant is allowed access) or it could be a later date (eg when the lease is actually completed), but that date is crucial to ensuring that the rent commencement date is correct.

Developer's compliance with obligations

The importance of ensuring satisfaction of obligations before completion

The developer may be obliged to:

  1. deliver collateral warranties, the health and safety file, as-built drawings, maintenance manuals, a licence for alterations to deal with any tenant’s variations to the original developer’s works and

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