Steps to Renewing Your Commercial Lease
The first thing you should do if you’re considering renewing your commercial lease, for starters, is to check your rental contract (the lease). The lease itself likely includes a clause about renewal – many property owners write this into the contract. Check for any information in the lease regarding a renewal option; it will usually state a time frame – typically a month or more before the contract expires – within which you should notify the property owner if you’ve decided to renew.
This notification should be done in writing so that it’s legally on record for both sides. The lease will also often state the terms of renewal; it’s very common for the option to be a five-year renewal term, although this can vary depending on the length of the original lease.
What if There Is No Renewal Clause?
Even if your contract doesn’t mention a renewal option, that doesn’t mean renewal is not available to you. You should contact your landlord as soon as you’re considering renewal, even if you haven’t fully decided yet. Because it’s your responsibility to notify the landlord as soon as possible when you do decide to renew, beginning the conversation about it sooner rather than later will help you keep all of your options open.
Make it clear that you’re interested in renewal of the commercial for lease property, but that you have not fully decided yet, and find out whether he or she is open to the idea and what terms might be required. Ideally, as it was when you first signed the contract, the terms will be up for negotiation and the landlord will be willing to work with you, although you shouldn’t be surprised by a rent increase, especially if the market in the area has changed – this is par for the course with commercial leases.
What if You Can’t Renew?
Of course, in some cases, it’s just not possible to renew a commercial lease. This might be the case when the property owner has other plans for the property, has decided to sell, or is no longer interested in working with tenants. It can also happen if you haven’t had a positive relationship with the landlord, or if he or she wants to change the rental terms so drastically that it’s obvious they do not want to keep the same renters around. This is entirely their choice, and if you find yourself in this situation, it will be time to move on when your contract ends. 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 in Renewing Your Commercial Lease
Just as with your initial lease, it is a good idea to have your lease renewal document reviewed by a qualified commercial real estate lawyer. Your attorney can make sure the lease contains terms that are in your best interests and that fully protect your rights as a tenant.