What Is the Difference Between a Lease Renewal and Lease Extension?

Many landlords often find themselves asking, “What is the difference between a Lease Renewal and a Lease Extension?” 

Understanding the difference between lease renewals and lease extensions is vital to any landlord who might want to continue renting to a tenant after an original lease expires.

If you are a landlord wondering how to renew or extend a lease agreement, read on to learn how you can do so by using common real estate documents.

While a lease renewal creates a new agreement for a new term period, a lease extension lengthens the term of an existing lease. 

Table of Contents

• What is a Lease Renewal?
• What is a Lease Extension?
• Summary
• Crease Your Lease Renewal and Lease Extension Forms
• Frequently Asked Questions (FAQs)

What is a Lease Renewal?

A lease renewal creates a new lease contract based on an existing lease that is due to expire. It often carries all existing lease terms over into a new contract with a new and updated rental period. But, sometimes, a lease renewal consists of a new lease with terms or clauses slightly modified from the original lease.

Other ways to refer to a lease extension agreement include:

• Residential Lease Renewal Agreement
• Lease Renewal Form
• Lease Renewal Letter

If landlords want to increase rent for a renewed lease, they may do so by clearly stating the new increased rent on the lease renewal form.

When should a landlord use a lease renewal form?

Landlords should use a lease renewal form when they want to:

• Continue a residential tenancy under the same conditions for a new lease period
• Keep the same tenant for another year (or a different lease term) and increase rent
• Update the terms of the lease agreement

These situations and others make a lease renewal useful for a landlord.

A landlord can refuse to renew a lease.

A landlord does not have to renew a lease. Landlords can refuse to renew a lease at the end of a lease term if:

• A tenant consistently fails to pay the rent or pays late
• The tenants cause property damage or violate the lease policy
• A landlord plans to sell the property
• The landlord wants to moves into the home
• The property owner has other legal reasons to do so (check with your state)

It is illegal to refuse to renew a lease for discriminatory or retaliatory reasons (as a result of tenants exercising their rights). Make sure you know your state’s laws to avoid potential issues.

What is a Lease Extension?

A lease extension continues the existing lease for a set time period rather than creating a new contract. Landlords usually extend leases for a short term, for example, 3 months.

A property owner might extend a lease to give tenants a little more time in the rental. Often, a landlord extends a lease to benefit from an occupied property for a bit longer. 

In a lease extension, the original agreement usually stays the same, but a landlord can modify certain terms and clauses such as changing the rent amount. Of course, the tenant will have to sign the lease extension to agree to any new terms.

When should a landlord use a lease extension form?

Landlords may use a lease extension when they prefer to extend the current lease agreement for a short time rather than renew it for another full lease term. 

While lease renewals and lease extensions are similar in many ways, landlords often use the extension form when they want to keep a tenant in a property for just a few months after lease expiration.

Lease extension forms are helpful when:

• The tenant wants a short time to find a new place to live and you agree
• You want to find a new tenant but want to keep your property occupied for now
• You want more time to decide whether to renovate or sell the property

Summary

Landlords may use a lease extension when they prefer to extend the current lease agreement for a short time rather than renew it for another full lease term. 

While lease renewals and lease extensions are similar in many ways, landlords often use the extension form when they want to keep a tenant in a property for just a few months after lease expiration.

Lease extension forms are helpful when:

• The tenant wants a short time to find a new place to live and you agree
• You want to find a new tenant but want to keep your property occupied for now
• You want more time to decide whether to renovate or sell the property

Crease Your Lease Renewal and Lease Extension Forms

You do not have to create your lease renewal and lease extension agreements from scratch. Instead, you can easily make and edit these essential documents with our form builders. 

Using our step-by-step builder, you will see how simple it is to organize the information and produce the documents that best help you run your real estate business.

Frequently Asked Questions (FAQs)