Often a retail or commercial Lease will contain an option to renew which is a right of the tenant to obtain one or more additional Lease terms provided the tenant gives the landlord a written notice exercising the option within a specified time frame.
If the tenant gives the notice to the landlord outside the set time frame (usually three to six months before the expiration of the Lease) then the tenant will lose the right to a further term.
I have had a number of matters in recent times where the tenant has simply forgotten to exercise the option or attempted to exercise it too late. In either case, the tenant’s right to a renewed Lease is lost and it is totally within the discretion of the landlord whether or not to grant to a new Lease and on what terms. Even if the landlord agrees to a further Lease, the rent may be raised dramatically and much more than would have been the case if the tenant had exercised the option in time.
The lesson for tenants is to check the Lease to see if there is an option to renew and, if so, to diarise ahead so that this valuable right will not be lost.
May 2021