Lease Extension

Key points about a Lease Extension:

1. Purpose: To prolong the original lease term without the need for signing a brand-new contract. This is useful if both the landlord and tenant are satisfied with the current arrangement and wish to maintain it.
2. Negotiation: Although the core terms of the lease (like rent payment dates, property use, and maintenance responsibilities) often remain the same, both parties can negotiate new terms, such as:
   • Rent adjustment: The rent might increase or stay the same depending on market conditions or mutual agreement.
   • New term length: The extension could be for months or years, depending on what both parties agree upon.
3. Legal Binding: Once signed by both parties, a lease extension becomes legally binding and ensures the continuity of the rental arrangement.
4. Common Use:
   • Short-Term Extensions: If a tenant needs to stay for a few extra months, but not long enough for a new lease.
   • Long-Term Extensions: When a tenant wants to stay for another year or more, and both parties want stability without the hassle of drafting a new lease.
5. Difference from Lease Renewal: While an extension continues the existing lease with only minor changes (usually just the length of the term), a lease renewal may involve negotiating entirely new terms or creating a new lease document.

Example:

If a tenant’s lease expires in December but they want to stay until the following June, they could sign a 6-month Lease Extension. The landlord may decide to increase the rent by a small amount as part of the agreement, but all other lease terms would typically remain the same.

In summary, a lease extension is a practical way to continue a rental relationship with minimal changes, providing flexibility and stability for both tenants and landlords.

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