What Is a Commercial Lease Renewal?
A commercial lease renewal reestablishes the terms of the landlord-tenant relationship for a commercial property. This form uses the terms of an existing lease to renew the agreement for a new period.
The landlord and tenant communicate to ensure the renewal includes the proper information and terms. In some cases, small changes to the rent costs or policies may be made in the renewal contract. You may use Legal Templates’s free commercial lease renewal to keep reliable tenants on your commercial property.
Lease Extension vs. Lease Renewal
A lease extension only changes the agreement’s expiration date while keeping the existing agreement active. A lease renewal creates a new contract and can include updates to the rent or other terms as needed.
How to Write a Commercial Lease Renewal Agreement
Writing a commercial lease renewal requires you to consider the existing agreement and the changes you want to make. Create an effective lease renewal for commercial tenants with the following steps.
Step 1 – Record Tenant and Landlord Information
Note the name and address of both the landlord and tenant entering the renewal agreement. Also, mark whether each party operates as an individual or entity. Ensure the information is accurate and make any necessary updates to the existing commercial lease.
Step 2 – Refer to the Existing Commercial Lease
A commercial lease renewal requires a previous agreement and often uses many of the same terms. Include a clear reference to the original commercial lease by providing the date of signing, the expiration date, and the specific clause or terms regarding the renewal. Also, record the exact legal address of the commercial property being leased under the existing and renewal agreement.
Step 3 – Set New Terms
Create the terms of the renewal agreement and clearly mark any changes from the original lease. Include the lease’s new start and end dates. Typically, the new start date will be the original lease’s expiration date. If applicable, notify the tenant of any rent increase. Both the landlord and tenant should conduct a market rent review to determine a fair rate.
You can also add any new provisions or restrictions for your commercial tenants. For example, you may convert the commercial lease to a triple net, commercial gross, modified gross, or percentage lease. Under the commercial renewal, you may also permit or forbid the tenant from:
- Subleasing the property to other tenants.
- Making modifications to the property.
- Expanding their operations into more space.
- Assigning the commercial lease to another tenant.
Consider creating a lease addendum to supplement the terms of a lease with additional provisions and disclosures.
Step 4 – Establish Governing Laws
Finally, select which state’s laws will govern the lease terms and any future disputes. Include the renewal of the commercial lease agreement date to establish the timeline and effective date.
If you’d rather end a commercial lease, use Legal Templates’s commercial lease termination letter.
Sample Commercial Lease Renewal Agreement
Use Legal Templates’s free commercial lease renewal form to maintain the relationship and agreement with tenants. Our customizable template is available to download in PDF and Word format.
