A lease extension addendum is a contract that extends the terms of a pre-existing lease agreement further. Upon a shared understanding between the tenant and Landlord, an extension addendum establishes a new lease termination date. Aside from establishing the extension to the original lease’s term as an addendum, when necessary, the document may also indicate any changes to the cost of rent during the extended lease period.
Components Included in Lease Extension Addendum
Much as the addendum will differ according to the parties’ needs, there are some essential components that should be included in any valid lease extension addendum.
These components include:
Terms for the extension
A lease extension addendum should include the rules regarding the domicile during the extended rental period. Such regulations include clauses such as a modification and improvements clause that generally outline which steps the tenants are to make to maintain the residence.
The rent amounts
If there isn’t a change in rent, the addendum must still restate the previous rent and retain the same amount during the extension period.
If there is an increase in rent
All through, a change in rent will be discussed and agreed upon orally, even before having it drafted; any change must be well articulated in the lease extension addendum.
A clause stating rights from the previous lease
A lease extension addendum is a supplement to the original lease and not a replacement; there must be a clause pointing this fact out in the addendum. Otherwise, the lack of the clause would open a window for any party to argue that the former rules do not apply and that the addendum was a contract renewal, which it is not. The clause should declare the addendum a supplement that continues all the options and rights set out in the original agreement.
Writing a Lease Extension Addendum
Writing a lease extension addendum can be simplified by breaking down the essentials into segments. The following is a step-by-step guideline on what to write, where to, and in which manner:
Enter the essential information
A lease extension addendum will require the name of the Landlord and tenant(s) with a referral to the original agreement. You either place this segment in paragraph form or point form.
This is an Extension of Lease Agreement Made by and between the following: __________________, landlord and _____________, tenant, as a continuation to the lease agreement for the premises whose address is: Street: _____________ City: _______________ County: _____________State: ______________
Zip: __________________ Dated: _____________________ Name of Lease: ________________
Point form example:
Address of the Property: _______________
City: _____________State: ______________________ Zip Code: _________________Date of
Amendment: ________________Lease start Date: ___________________ Lease End Date: ______________
Provide length of the agreed-upon lease extension
Once the addendum has set out the parties to the contract and the building in question, it must then outline the timeline of the extension. The segment will refer to the date that the extension is to start its existence and the last day of the same. The setting of the timeline must be discussed before drafting and later, before signing.
This segment also includes a statement on the contingent conditions to break the lease before the date. In most cases, tenants would be required to pay the Landlord an extra amount. The amount in most addendums often equivalents to the amount pending on their lease to break it. Some addendums allow tenants to seek another tenant whom they would allow to continue paying the rent should they want to move out before its expiry. The terms of such scenarios must be explicitly detailed in the addendum.
For reasonable consideration, the Landlord and tenant each consent to the extension of the term of the aforementioned lease for a period of __________ which commences on ___________ [start date] and terminates on ___________ [ending date]. Beyond this period, none of the parties hold a right of extension or renewal.
During the extended period, the tenant __________ shall pay the landlord a monthly rent of $_________ payable in advance.
Other terms of this extension are as follows:
_______________________ [indicate any changes, additional regulations or a clarification of a clause in the original tenant agreement]
However, it is further provided that all the other terms of the original lease agreement will continue to apply during this extension term.
This agreement shall bind upon and ensure to benefit the parties, their assigns, successors, and personal representatives.
Landlord and tenant signature at the bottom of the page
The signatures segment lies at the bottom of the lease extension addendum: all the parties subject to the agreement must provide their signature at the end of the addendum and the date they signed.
Signed on Date
Landlord Name Landlord Signature
Tenant’s Name Tenant’s Signature
Next, one must include the address of the premises. Leave out no detail, including the name of the premises, the city it is in, state, and zip code. There is also no harm in indicating the street that it is on.
A lease extension addendum contains several dates. It will include the date on which the extension addendum conditions will take effect and their termination date. The most forgotten in the execution day which is the date on which the two parties sign the extension addendum and add it to their original rental agreement.
Lease start and end date
This segment explicitly states the day that the extension addendum begins and the date on which it expires. Often the addendum is provided a few weeks or a month before the original lease has expired. Therefore, it must include the new lease extension beginning and end date.
The Lease Extension Process
Before and after drafting a lease extension addendum, the are a few steps to follow to establish a lease extension through an addendum.
The steps include:
Reviewing the original lease
The first step in a lease extension process is locating the original lease agreement to identify its end date. The original lease agreement also serves as a reference point for any changes to include in an addendum. The most common shift in lease extensions is often changing in the amount of rent; depending on the economic conditions, either party may ask for an increase or decrease of rent. Both the Landlord and tenant go through the original agreement and note down any changes they wish to ask for or retain.
After reviewing the original lease agreement, a landlord contacts their tenant to find out if they wish to have their lease extended. If the tenant shares an interest, the discussion then discusses whether to keep the current terms or renew them. A tenant may also reach out to their Landlord for an extension; both parties share their view on any of the conditions they wish to remove from the original lease agreement or modify. Changes in rent are also discussed at this point, and the parties may negotiate the value. If the two agree, the process then moves to the next stage.
Sending the lease extension addendum
Once the intentions are set out, the Landlord either mails or delivers the addendum to their tenant (s). The lease agreement addendum is attached to the original lease agreement to record any changes made to it. The rest of the entire original lease agreement remains intact.
Signing the Addendum
Once a tenant receives the lease agreement addendum, they review the addendum’s terms of extension and sign it in agreement. The Landlord also signs the addendum to officiate the document.
Consequences of Not Using a Lease Extension Addendum
If a tenant remains in tenancy without a lease extension after the original lease’s conclusion, the tenant legally becomes a holdover tenant. The lease automatically converts into a month-to-month tenancy. In such circumstances, a landlord cannot re-negotiate the rent cost while tenants are prohibited from making negotiations for any property related provisions or repairs,
Lease Extension Addendum Vs Lease Renewal
When writing a lease extension, it’s essential to understand its difference from a lease renewal to appreciate its language, constituents, and purpose. The best way to grasp this concept is by understanding the impact of either document on the conditions and promises on the original lease agreement.
A lease renewal is the creation of a new lease agreement. Parties to this document renew their landlord-tenant relationship after the expiration of the original. A lease renewal is not continuous; there is a legal instant time lying between the initial lease agreement’s expiry, and the new term’s start indicated in the new lease. When an original lease is reassigned, a renewal of the lease may limit the initial tenant’s remaining liability to the Landlord.
Many reasons could lead to the use of a lease extension addendum. One is where a tenant has adhered to all the terms of the original lease and a landlord wishing to retain them: the two would use an extension to maintain the previous lease agreement. This move bypasses any additional administrative work that would otherwise exist in writing a new liaise plus subsequent administrative costs.
Another reason that could necessitate an extension addendum is when a tenant requires extra time to locate a new place to move or finish moving. When the process requires less than a full year or less than a full term, may request an extension addendum. Short-term lease extension addendums are often month to month with a higher rent quotation than over one-year extensions.
It’s essential to carefully consider each document’s potential drawbacks and benefits before picking which one to use. Regardless of choice, transparent, intentional, and explicit language that reflects the document’s intentions is paramount in avoiding any unintended consequence of the drafting of either document.
Lease Extension Addendum Template
The following is a sample template for a residential lease extension addendum
Lease Extension Addendum
City: _ State: Zip: ___
This is a Residential Lease Extension Addendum mase and hereby entered into by the tenants listed above and ____________, hereafter referred to as the landlord.
The Landlord and tenant fully intend to bind themselves by this extension agreement. Now, in consideration of the mutual covenants contained herein, the Landlord and tenant agree to the following terms.
The termination date provided on the lease agreement shall extend for an additional _ months. The extension remains based on the same terms and conditions set out in the original lease agreement, excluding the amendments amended in this extension addendum. The new lease termination date henceforth set to be on //_.
For the extension period beginning //, the rental amount shall be $ _, until the termination date provided in this addendum.
This lease extension addendum is hereby executed on the _ day of __,20____________.
When preparing to write down a lease extension, make a list of any changes you wish to make in the original lease, then use the information as a guideline to write the addendum. We have prepared free lease extension addendum templates that you can review, download, customize and use for your convenience. Our templates are concise and thorough to ensure no essential detail is left out.
A lease extension addendum serves as lease renewal; it allows a tenant and Landlord to extend the existing lease agreement beyond its expiration or end date while upholding the original lease’s remaining rules and conditions. A well-drafted lease extension addendum also allows the amendment of any clause in the existing lease without re-doing a lease agreement. A lease extension addendum is also a point to refer to in case of any future disagreements; it is vital to f understand how to draft this document thoroughly. With proper guidance, such as our detailed template, writing a lease extension addendum is a lot easier than re-writing a lease agreement