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Commercial leases often contain the option of additional or renewal terms to extend the lease term Reviewing and understanding this provision in your lease can help maximize your lease rights whether you are the landlord or the tenant
Most commercial leases require the tenant to notify the landlord if they wish to exercise an option to renew their lease For example if your original commercial lease has a fixed term from 1 July 2022 to 30 June 2025 3 years then a 3 year option would extend the lease term from 1 July 2025 to 30 June 2028
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Service Agreement Renewal Template
Service Agreement Renewal Template
An option to renew is a contractual provision in a commercial lease that grants the tenant the right but not the obligation to extend the lease term for an additional period after the initial lease term ends
Options to renew are common in both retail and commercial leases to provide the Landlord and the tenant with the opportunity to extend the term of the lease without the need to renegotiate a majority of the terms
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40 Free Not Renewing Lease Letters Samples TemplateLab
40 Free Not Renewing Lease Letters Samples TemplateLab
What is a Renewal Option in a Lease An option in a commercial or retail lease provides the Tenant at their sole discretion with the right to extend the lease for a further term If the Tenant elects to exercise or trigger the Option the Landlord must accept the new lease period and the terms agreed in the option so long as
During the negotiations of a lease agreement and during the renewals or extensions thereof it is important for both tenant and landlord to consider the differences between an option to renew and an option to extend a lease agreement
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Most commercial leases require the tenant to notify the landlord if they wish to exercise an option to renew their lease For example if your original commercial lease has a fixed term from 1 July 2022 to 30 June 2025 3 years then a 3 year option would extend the lease term from 1 July 2025 to 30 June 2028
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An option to renew or an option to extend clause is a common feature of commercial leases It s important to understand the distinction between these two types of clauses and the implications they may have on the lease and the landlord tenant relationship
Most commercial leases require the tenant to notify the landlord if they wish to exercise an option to renew their lease For example if your original commercial lease has a fixed term from 1 July 2022 to 30 June 2025 3 years then a 3 year option would extend the lease term from 1 July 2025 to 30 June 2028
An option to renew or an option to extend clause is a common feature of commercial leases It s important to understand the distinction between these two types of clauses and the implications they may have on the lease and the landlord tenant relationship
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