Commercial leases: renewal, or extension of term?

Most commercial leases have some sort of clause where the tenant can continue to occupy the space. These clauses can be:

  1. an extension of term – which continues the original lease, with a few terms changed; or
  2. a renewal – which ends the original lease, and creates a whole new one.

The consequences of this legal sorcery can be far reaching. My associate, Adam Veroni, handles much of the commercial leasing work at Intrepid Law. He’s written an article explaining the differences, and suggesting a few ways to approach negotiations with your landlord.

Option to Renew in a Commercial Lease

… An option to renew is not necessarily a simple add-in to a lease, and if not drafted correctly, can end up in costly disputes. There are three issues, in particular, that should be ironed out before a lease is signed:

  1. how the rent will be determined for a renewal period;
  2. whether the option to “renew” should be an option for an “extension of term” (the difference will be discussed below); and
  3. what other terms of the original lease are to carry forward in the new lease.

Read the full article here:


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