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A lease extension agreement is a legal contract that allows an existing tenant to continue to reside on the property for an extended period of time after the initial terms of their original lease agreement. You will often see lease extension agreement requests when a tenant cannot find adequate housing before their mandatory move-out date.
In commercial property rentals, a lease extension agreement allows the business to remain in operation on the property after the original assignment of lease.
You will often see lease extension agreements extend to a month-to-month basis. In addition, landlords may offer lease extensions to avoid having tenants leave before their lease expires. Lease extensions can also be requested by tenants.
For this type of arrangement to work, the landlord must seek a lawyer for lease agreement to ensure that their lease addendum meets all state and federal property law requirements.
A lease extension can apply to residential or commercial real estate properties. It allows tenants to remain on premises after their original lease has recently expired.
A lawyer should review this agreement to ensure that it is fair and legally binding for both parties.
A lease extension agreement template can cover a number of different factors, which you may add or remove depending on your situation. These are some of the most relevant parts to include in a general lease agreement contract.
This section should specify which premises are being leased and which properties a lease agreement extends to. You may include the address and describe the property in complete detail, including its square footage and associated areas, e.g., a parking space/garage, access roads, warehouse, etc.
Both rental and commercial lease agreements should include a complete and accurate description of the property.
Meet some lawyers on our platformThis section should state whether any further construction will be made to the property by the landlord. If not, the landlord should include a statement that they will not make any additions or modifications to the property’s structure.
In this section, the landlord may detail what modifications or improvements a tenant may make to the property for their improved quality of living. However, a landlord needs to note that the tenant will be fully responsible for the cost of any improvements, and they must receive written approval from the landlord.
Make sure that you also include a deadline for landlord approval, no more than 5 to 7 business days.
Finally, ensure that any permissible modifications comply with federal, local, state, and building and fire codes. The writer should also clarify that the tenant cannot take out liens for construction labor or building materials.
This portion of a lease agreement details what types of machinery, fixtures, equipment, and partitions the tenant can modify, add or remove from the premises.
If any additions or improvements are made, will they belong to the tenant and be removed after leaving? Or, will they remain the landlord's property regardless of who paid for their installation?
This part of a lease establishes boundaries for the client regarding how much they can change a property’s essential equipment, like an HVAC system, plumbing, and light fixtures.
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The issuer of a lease agreement should include clear instructions on what the tenant must do at the time of termination. The move-out date may or may not be included depending on the terms of a lease agreement, i.e., month-to-month or set expiration.
The conditions of lease termination can also further clarify what property fixtures, equipment, and improvements are to be left to the landlord’s possession.
A lease agreement should include a section that explains the landlord’s rights to modify, upgrade, repair, or replace fixtures and equipment. This section should consist of heating, ventilation, air conditioning machinery, and plumbing. This must be done in a manner that is not disruptive to the tenant’s life and does not leave their premises unusable, partially or entirely, for any period of time.
The landlord may wish to advertise a property as available for rent and show it to prospective tenants before the end of a lease agreement.
In this section, the landlord will define how they may display the property for advertising purposes. This includes if they show the property and how soon they will notify tenants before any advertisements are posted or conducting property tours.
Additional articles within a lease agreement should include:
A net lease requires the tenant to pay all of the property’s taxes, insurance premiums, maintenance fees, and base rent. A percentage lease requires the business owner to pay rent and a percentage of the revenue they earn on the premises.
You may need a lease extension agreement if you want to remain in a property for longer than your original lease, but you do not wish to renew the lease entirely.
New leases may require you to stay on the premises for 12 months or more, but a lease addendum can extend your lease by several months or even place it on a month-to-month basis.
Lease extensions can help you in-between housing. For example, you may already have a new property secured. Still, your lease may not start before or immediately after the end of your lease. An extension could help you maintain stable housing until your new lease begins.
For business owners, lease extension agreements can help them avoid significant profit losses when they move their establishments to a new location. As they prepare to move into their new location, they can continue operating out of their existing building until their new lease begins or they have completed transferring all their equipment to a new property.
A lease renewal is a new agreement. Renewing a lease means the terms may change, rent may increase, and additional requirements or modifications may be made to the arrangement.
A lease extension is an addendum to a lease, meaning it extends the original lease terms but does not modify them. It’s also important to note that in terms of a lease vs. rent agreement, the terms also differ as well.
Here is an article for landlords that explains the renewal process, including when and when not to renew a tenant’s lease.
Residential and commercial property leases are usually extended the most. However, many renewal agreements in managed residential apartment buildings may also offer the tenant the option to extend their lease or resort to a month-to-month arrangement for a higher rent price.
Car leases may also be extended. A car lease extension for a car can help a renter maintain a vehicle monthly until they arrange for a new one.
This article explains car leasing extensions and other strategies renters may use to save money.
A month-to-month lease extension agreement can be for a set period of time, e.g., 6 months, or on a month-to-month basis. For example, a month-to-month rental lease agreement allows the landlord to change the rent price while permitting the tenant to remain on the premises.
Many landlords will use this strategy to increase rent prices for tenants who need to stay on the property as they transition between leases between their current building and a new one.
Here is an article that offers a free month-to-month lease addendum template and explanation video.
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ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
Terry Brennan is an experienced corporate, intellectual property and emerging company transactions attorney who has been a partner at two national Wall Street law firms and a trusted corporate counsel. He focuses on providing practical, cost-efficient and creative legal advice to entrepreneurs, established enterprises and investors for business, corporate finance, intellectual property and technology transactions. As a partner at prominent law firms, Terry's work centered around financing, mergers and acquisitions, joint ventures, securities transactions, outsourcing and structuring of business entities to protect, license, finance and commercialize technology, manufacturing, digital media, intellectual property, entertainment and financial assets. As the General Counsel of IBAX Healthcare Systems, Terry was responsible for all legal and related business matters including health information systems licensing agreements, merger and acquisitions, product development and regulatory issues, contract administration, and litigation. Terry is a graduate of the Georgetown University Law Center, where he was an Editor of the law review. He is active in a number of economic development, entrepreneurial accelerators, veterans and civic organizations in Florida and New York.
Scott graduated from Cardozo Law School and also has an English degree from Penn. His practice focuses on business law and contracts, with an emphasis on commercial transactions and negotiations, document drafting and review, employment, business formation, e-commerce, technology, healthcare, privacy, data security and compliance. While he's worked with large, established companies, he particularly enjoys collaborating with startups. Prior to starting his own practice in 2011, Scott worked in-house for over 5 years with businesses large and small. He also handles real estate leases, website and app Terms of Service and privacy policies, and pre- and post-nup agreements.
I am a licensed and active NY and CT Contracts Attorney, with over 20 years of diverse legal and business experience. I specialize in reviewing, drafting and negotiating commercial agreements. My practice focuses on working with small business clients as well as clients from international brokerage firms on acquisitions, especially in the Ecommerce space; drafting, negotiating, reviewing and advising on business agreements; ; breach of contract issues, contract disputes and arbitration. I am licensed to practice in New York and Connecticut, and am a FINRA and NCDS Arbitrator. My experience includes serving as General Counsel to small businesses. This entails reviewing, updating and drafting contracts such as employments agreements, asset purchase agreements, master services agreements, operating agreements and a variety of business and commercial contracts. Additionally, I assist clients with business strategies, contract disputes and arbitration. My diverse experience allows me to give my clients a well-rounded approach to the issues they face. I have been at top AML law firms; a Vice President at an Investment Bank, a Civil Court Arbitrator presiding over cases in contract law, commercial law, a Hearing Officer, presiding over cases and rendering written decisions, and a Judicial Clerk to a Civil Court Judge. It would be a privilege to assist you and your business with my services.
