What is an option to renew in a lease?

An option to renew in a lease refers to a provision that grants the tenant the right to extend the lease for an additional term under specified conditions. This clause is beneficial for both parties; it provides the tenant with security and continuity in their living or business situation, while also offering the landlord the assurance of continued tenancy without the need to seek new tenants. When a lease includes an option to renew, it typically outlines the duration of the additional term, any conditions that must be met for the renewal to be exercised, and any changes to the rent or other lease terms that might apply during the renewed period. This option is crucial in long-term lease agreements as it allows tenants to maintain their occupancy without the uncertainty of finding new premises, while landlords can benefit from maintaining their tenant relationship and steady rental income.