Renewing Your Commercial Lease
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UPDATED: Jul 16, 2021
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If your business is doing well and you are pleased with the commercial lease agreement with your landlord, you might want to extend your lease beyond the initial term. You do not expect to grow out of this space, you do not want to relocate, and you do not expect to downsize your business. Renewing your lease might be in your best interest.
Steps to Renewing Your Commercial Lease
If you are considering a renewal, first examine the terms of your existing lease agreement. It typically contains provisions to extend your lease. A renewal clause usually spells out the time frame required to give the landlord notice, if you want to exercise this option. It also typically indicates the length of the lease renewal period, and the rental rate. If you exercise this renewal clause, you should notify the landlord in writing to avoid any uncertainties about your decision and the renewal terms.
No Renewal Clause in Your Lease
Even if your present lease agreement makes no mention of an option to renew, you might still be able to continue your tenancy. Notify your landlord as soon as you are considering a renewal to extend your lease. Ideally, you have a good business relationship and can negotiate favorable terms to protect your interests.
You Cannot Renew
In some cases, the landlord will not grant you a renewal for your business. The property owner might have other plans for the property, has decided to sell, or is no longer interested in working with you. The owner might also want to change the rental terms drastically and work with new tenants. However, asking for a conversation about renewal, particularly if the commercial lease has been a positive experience for both sides, is always worth a try.
Getting Help from a Real Estate Lawyer
Just as with your initial lease, it is a good idea to have your lease renewal agreement reviewed by a qualified commercial real estate lawyer. Your attorney can help clarify any existing terms in the lease that are unclear, and suggest additional provisions to more fully protect your rights as a business tenant.