What is an "option to renew" in a lease agreement?

An "option to renew" in a lease agreement is a specific provision that grants the tenant the right to extend the lease term beyond the original expiration date. This clause is designed to provide security to the tenant by ensuring that they can remain in the property for an additional period, often under the same terms and conditions as the initial lease.

This option is beneficial for tenants who may want to continue occupying the premises without undergoing the uncertainty and potential challenges of negotiating a new lease agreement. Typically, the terms of the renewal, such as the duration and any conditions that might apply, are clarified within the lease, allowing the tenant to plan for their ongoing occupancy.

In contrast, other clauses such as those allowing rent increases or outlining obligations for early termination do not specifically pertain to extending the lease. Likewise, provisions related to subletting focus on the tenant's ability to lease the property to someone else, which is entirely different from the tenant's right to renew their own lease. Thus, the "option to renew" is fundamentally about extending the existing lease agreement rather than addressing conditions or rights related to terminations or other uses of the property.