If you’re currently renting an apartment or office space, you may be wondering whether or not it’s worth your while to renew or extend your lease when it comes up for renewal. After all, the paperwork can be confusing and the fees can add up quickly if you aren’t careful! But what are the real differences between lease renewal and lease extension?
The differences
Lease renewal refers to when a tenant and landlord agree to a new lease term, which generally involves updating clauses and raising rent prices. A lease extension refers to when a tenant wishes to extend their lease term for a certain period by amending their lease.
When should you renew your lease?
If you're looking to stay in your current location, you'll want to consider renewing your lease. Renewing a lease is when you sign a new lease agreement with the same terms and conditions as your old one. Some landlords will offer incentives, such as rent discounts or free rent, but this isn't always the case. However, if you're able to negotiate with your landlord for more favorable terms and conditions, it might be worth considering renewing.
When should you extend your lease?
Extending your lease is a good idea if you're hoping to keep your rent costs low for the foreseeable future. A lease extension will typically lower your monthly rent, which can be beneficial if you're on a tight budget. If you want to avoid any sudden increases in rent, extending your lease might be a good option. However, there are some disadvantages to extending as well. A lease extension is just that—an extension of an already existing agreement with the landlord.
Can tenants negotiate the terms of a lease renewal?
Tenants may be able to negotiate a lease renewal if they find clauses in the contract that violate their tenant's rights or local landlord-tenant law. On the other hand, if the new lease agreement doesn't violate any ordinances, then the landlord may maintain control.
It's important to communicate what you would like changed before you sign the lease if you plan to negotiate the terms as a tenant. Your chances of persuading the landlord are improved by doing this.
How to choose between extending and renewing the lease
On the off-chance you find renting the property worthwhile and you get along well with the landlord, it may be worth renewing the lease. Otherwise, if you need more time to find a different rental, an extension of the lease can give you a chance without being locked in for the long term.
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