Part 10*: How is the “Term” of the lease defined in a commercial lease agreement? How does a renewal term/extension term work?

Each lease is structured differently. Some leases have a fixed term, such as five years. Other leases may have an initial term followed by extension terms. For example, a lease may be for an initial term of five years plus two five year renewal terms at Tenant’s option. Other leases may state that the lease shall automatically renew for a certain term of years unless either party elects to cancel.

The rent for the extension terms is often negotiated among the parties. The rent may increase by a stipulated percentage or based on the Consumer Price Index. Or the rent may be based on fair market value. The lease will dictate how the rent will be determined if the parties disagree on fair market value, and the process for resolving a dispute.

*Thank you for taking the time to read this article. This article is part of our “Commercial Leasing for Non-Lawyers,” a Blog Series on Commercial Leasing. Other aspects of commercial leasing transactions in New York are discussed in other Parts of this series.

For questions about residential real estate law, or general information about our firm, please contact us at (914) 338-8050 or send an e-mail to keith@betenskylaw.com. We look forward to hearing from you.

Betensky Law PLLC
118 N. Bedford Road, Suite 302
Mount Kisco, New York 10549
(914) 338-8050
keith@betenskylaw.com
www.betenskylaw.com

This is ATTORNEY ADVERTISING. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of an attorney/client relationship. Prior results do not guarantee a similar outcome.

Leave a Reply

Your email address will not be published. Required fields are marked *

Contact Us

Give us a call or fill in the form below and we will contact you. We endeavor to answer all inquiries within 24 hours on business days.