The Notice to Landlord of Exercise of Option to Renew Lease Form is used by a tenant (usually of a commercial premises) to notify their landlord that they wish to renew their lease where they have been given the option to renew.
An ‘Option to Renew’ clause is an offer from the landlord to the tenant to either renew the lease or to terminate the tenancy on the expiry of the current lease. The most important aspect of an option to renew clause is that it gives the tenant, not the landlord, the option to renew the tenancy.
A standard option to renew clause appears in the lease as follows:-
“Provided that the Tenant is not in default under this Lease, the Tenant shall have the option to renew this Lease for an additional term of X years at Fair Market Rate”
N.B. Fair Market Rate means the market rental rate calculated for comparable premises at the time of exercising the option to renew.
If the tenant does decide to renew their lease, they will have to notify their landlord by completing the Notice to Landlord of Exercise of Option to Renew Lease Form. The lease will stipulate the minimum notice period required.
- At the top of the page you date the form on the date it is served on the landlord, ensuring that it is within the time constraints under the lease.
- Under the date section, where the word ‘To’ can be found, you enter the full names and address of the landlord (this can be found in the current lease).
- You then enter the full address of the property being rented in the next gap after the word ‘premises’.
- Under this section, you enter the term the lease is to be extended by. This will be stipulated in the ‘Option to Renew’ clause of the current please.
- In the last sentence of the form, you enter the clause number the ‘Option to Renew’ clause is found in under the current lease.
- You/the tenant then signs at the bottom of the form.
Once the Notice to Landlord of Exercise of Option to Renew Lease Form has been completed and signed, it can then be served on the landlord.
Text version of this Form
__________________ , 20____
Reference is made to the Original Lease Agreement (“Lease”) between Landlord and the undersigned as Tenant in respect of the premises described in the Lease for the following premises: _____________________________ _____________________________________________________________ .
You are formally notified by this letter that the I am hereby exercising my right to renew the term of the Lease for a term of _______________, as specified in the Lease.
This Notice is given to you in accordance with paragraph _________ of the Lease.