Lease Extension Agreement Template
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If you have experience with either renting a property or leasing one out, you’re definitely familiar with standard lease agreements. When the pre-existing lease is going to expire, a lease extension agreement can help you prolong the lease terms.
If both parties wish to continue with their current arrangement, they can add a lease extension addendum to the original contract. By using a template in these situations, you can ensure that all of your rights are protected.
When to Use a Lease Extension Agreement
If you enjoy living in your apartment but don't want to renew your lease entirely, you can ask for a residential lease extension. This allows for more flexibility and opportunities to renew the rental agreement. For example, you might continue your rent on a month-by-month basis.
Alternatively, if you are a business owner, you may want to enter into a commercial lease extension. This is usually the case if you’re in the process of moving to new premises but want to safeguard yourself against heavy profit losses. Through the extension of your lease agreement, you can keep your operations going until you’re fully ready to relocate.
Parties of the Lease Extension Agreement
- Landlord — The landlord owns and leases out their property to the tenant. They usually initiate and draft the contract, whether it's commercial lease extension or extension of residential lease; and
- Tenant — The tenant rents the landlord's property for personal or professional use. They’re allowed to negotiate the new terms of the lease extension agreement.
Key Terms
- Lease term: This outlines when your original lease ends and when the extension begins;
- Security deposit: In the lease extension addendum, you can address whether to adjust the security deposit, keep it the same, or replace it altogether;
- Rent amount: This term explains how much the tenant pays under the new terms;
- Utilities and services: These include water, internet, or electricity and the responsible party all mentioned in the lease extension form; and
- Termination clause: This section outlines which circumstances would allow the tenant or landlord to end the commercial or residential lease extension agreement.
How to Write a Lease Extension Agreement
If you want to keep an existing tenant, follow these three steps to extend their lease. You might also consider using a lease extension agreement template from Loio; simply tweak the finer details to make sure they fit your individual needs and download a complete lease extension agreement pdf.
1. Review the original lease
Begin by reviewing the initial lease agreement between yourself and the tenant. When you have checked the terms and conditions, you can determine what areas you want to change or keep the same for your renew rental agreement.
Next, identify the clauses that may impact your lease extension. For example, such provisions state that the tenant needs a three-month warning prior to a rent increase.
Once you have a firm grasp of the facts, you can initiate the conversation by sending your tenant a lease extension letter. This is the first practical step towards negotiation.
Once the tenant receives the filled lease extension template outlining your proposal and suggested terms, they’re then free to raise any disagreements. At this stage, negotiations typically concern how long the new extension period should last and what the new rent will be.
2. Draft the lease extension form
After sending the proposal letter to your tenant, it’s time for you to begin drafting the new agreement. As the landlord, this is your responsibility. These are the terms to consider when writing the residential lease extension agreement:
Identities: The full names and addresses of both yourself, acting as the landlord, and your current tenant
Address: The address of the rental property
Time period: The dates and duration of both your original lease and the new extension period
New conditions: Any changes you make to the original terms, such as an increase in rental price
Signatures: Leave space for signatures and dates
3. Review and sign the lease extension template
Before finalizing the rental agreement extension, encourage the tenant to ask questions or raise any concerns. For example, they want to ensure that the new rental price aligns with the current market conditions in the property’s area.
This would involve researching what market developments came about after the original lease agreement was signed. This may be a rise in inflation or a luxurious renovation to the property. Once you’re both satisfied, you can sign the extension of lease agreement to make it legally binding.
By following the steps above, in combination with this Loio printable lease extension agreement, you can make sure that both you and your tenant’s rights are protected. As a result, you, as the landlord, can enjoy the security of avoiding unexpected vacancies.
Meanwhile, the tenant gains the stability of knowing they have a place to live or conduct business. The lease extension addendum builds trust between you both, ensuring a fruitful landlord-tenant relationship.
Related Documents
Frequently Asked Questions
An extension simply prolongs the end date of an existing agreement, whereas a renewal is treated as an entirely new agreement.
Tenants who remain in a rental unit after the lease has expired are called holdovers. The tenancy turns into a month-to-month or fixed term agreement if the tenant continues to pay rent. So long as the landlord doesn't take action to evict the tenant, a holdover tenant may stay in the rental unit. Staying in an apartment after the lease has expired can cause a number of problems, such as:
- In most cases, eviction laws are different for holdover tenants, as are many other procedures for resolving landlord-tenant disputes. Make sure you are in compliance with your local laws by checking your state laws.
- You may not have control over when there is a vacancy if it is more difficult to get rid of a holdover tenant. When it is difficult to find another tenant and sign a new lease, your tenant may move out.
- It might be necessary to postpone scheduled maintenance after tenants move out. Additionally, your tenant may cause more damage while they are still occupying the property.
- Tenants who are holdovers may not be able to raise their rent for as long as they stay - and sometimes, even longer.
Lease extension addendums extend the term of existing lease agreements. In the addendum, the landlord and tenant will agree on new termination date. This addendum could also document any changes to the rent amount during the extended lease term in addition to extending the lease term. If the extension is for a short period, it is common for the original rent amount to differ (and increase). In the addendum, you will find the amount. All other conditions from the original lease agreement will remain the same. Both the landlord and tenant must sign the lease extension addendum. When signed, the lease extension addendum becomes part of the current lease and is legally binding.