A lease extension agreement is a legal document that allows a tenant to continue occupying a property beyond the original lease term. It is essential for both the tenant and landlord to have a well-defined and properly executed lease extension agreement to ensure clarity and protection of their rights. Here are some common types of lease extension agreements:
1. Fixed-term lease extension: This type of agreement allows the tenant to extend their lease for a specific period of time, often one to five years. The terms and conditions of the original lease usually still apply during the extended period.
2. Monthly lease extension: This agreement allows the tenant to extend their lease on a month-to-month basis. It provides flexibility for both parties as it can be terminated with proper notice from either the tenant or the landlord.
3. Option to renew lease extension: In this agreement, the tenant has the right to extend the lease for a predetermined period outlined in the original lease. The terms for the extension, such as rent increase or any changes to the agreement, are often negotiated beforehand.
4. Automatic renewal lease extension: This type of agreement stipulates that the lease will automatically be extended for a specific period if neither the tenant nor the landlord provides notice to terminate the lease by a predetermined date. The terms of the extension can remain the same or be adjusted as specified in the original lease.
5. Lease extension with rent adjustment: In some cases, a lease extension agreement may include provisions for adjusting the rent during the extended period. This can be based on market rates, inflation, or any other agreed-upon factors.
6. Lease extension with improvements: This type of agreement grants the tenant the right to make improvements or modifications to the property during the extended lease term. It would outline the scope of the improvements, allowable costs, and any requirements for restoring the property to its original condition upon termination.
7. Lease extension with purchase option: This agreement provides the tenant with the opportunity to buy the property at a predetermined price during or at the end of the lease extension period. It often includes specific terms and conditions for exercising the purchase option.
It is important for both landlords and tenants to carefully review and understand the terms of any lease extension agreement before signing. Consulting with legal professionals and seeking appropriate advice can help ensure that the agreement meets their specific needs and protects their interests.