When it comes to any commercial or retail lease, it’s always important to check that your documents are legally correct. Why?
A Lease Agreement binds you to certain obligations over quite a long period of time. For example, it will set out:
- Duration of the lease
- Payment terms (for example, when rent is due)
- Who can occupy the premises
- Rules around repairs and maintenance
- Restricted activities
So, if you plan on extending your lease, you’ll need to think about whether you are prepared to commit to these obligations for a longer period of time.
What Happens When A Lease Ends?
If your lease is ending, you have two options.
- End the lease and give the property back
- Extend or renew the lease
If you plan on keeping the property for your business a little longer, this is where an Extension of Lease comes into effect.
How Does An Extension Of Lease Work?
When you extend your lease, you’ll need to sign an Extension of Lease. However, keep in mind that you can negotiate the terms of the lease.
Generally speaking, you should give written notice to your landlord if you want to extend your lease, and the timeframe for doing this should be set out in your lease.
Keep in mind that your lease might have different requirements around how this should be done, so double check!
You might also want to negotiate your right to renew the lease in future. If you have a clear idea of how much longer you want the lease to be extended for, or if you want it to be a long-term arrangement, you need to make this clear to your landlord and adjust your Extension of Lease accordingly.
Renewing Vs Extending A Lease
You might be wondering, ‘What is the difference between renewing and extending a lease?’.
They sound like the same thing, but they are quite different concepts. The main difference is that renewing is starting a new lease, whereas extending is continuing the existing lease. However, both require a new document for you to sign.
Why Do I Need A Lawyer To Review My Extension Of Lease?
Like we mentioned earlier, extending a lease means you’ll need to sign a separate document that makes this clear.
You can negotiate the terms of this extension of lease so that you are only committing to obligations that you are capable of fulfilling. For example, make sure that the payment terms are suited to your business, and the duration of the extension is consistent with your business plan.
This is why speaking to a lawyer should be your first step. Having your Extension of Lease reviewed is a great way to protect your business from any risk of liability during the extension.
Where Do I Start?
If your lease is about to expire, and you want to extend your lease, it’s worth speaking to a lawyer about the best way to go about the process. This way, you can make sure your documents are suited to your business’ needs and you can ensure that you’re only committing to what you’re prepared to be bound to.
If you would like a consultation on your options going forward, you can reach us at 1800 730 617 or firstname.lastname@example.org for a free, no-obligations chat.
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