Lease Renewal Clause
A lease renewal clause is a provision in a lease agreement that outlines the conditions under which the lease can be renewed upon expiration. This clause is essential for both landlords and tenants as it provides clarity regarding the terms for extending the lease, thereby avoiding uncertainty.
Typically, a lease renewal clause will specify the length of the renewal period, any potential changes to the rental rate, and the notice period required for either party to exercise the renewal option. For example, a lease may state that the tenant has the right to renew the lease for an additional year at a predetermined rate, provided they give the landlord 60 days’ notice prior to the lease’s expiration.
The presence of a lease renewal clause can benefit tenants by securing their right to remain in the property for an extended period, especially in a competitive rental market. For landlords, it provides an opportunity to ensure continued occupancy and steady rental income without the need to find new tenants frequently.
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