Lease Extension Addendum

A lease extension addendum is a contract that further extends the term of an existing lease agreement. The addendum will establish a new lease termination date that both the landlord and tenant agree to.

In addition to extending the length of the term of the original lease, this addendum may also document any changes to the price of rent during the extended lease period. It is common for the original rent amount to differ (and increase) especially if the extension is for a short period. This amount will be stated as part of the addendum. All other conditions from the original lease agreement will remain intact.

The lease extension addendum must be signed by the landlord and tenant. Once signed, the lease extension addendum is added to the current lease and is enforceable by law.

Lease Extension Addendum vs. Lease Renewal

Lease extensions and lease renewals both allow the tenant (and landlord) to continue to lease a property. However, if you want to extend your lease, you will want to identify which document is best for your circumstances. It is important to consider how the distinction between a lease renewal or extension might affect other promises and conditions in the lease agreement. While extensions and renewals have similar effects, there are some differences.

A lease extension is a continuation of the original lease agreement. The parties to the lease continue the landlord-tenant relationship beyond the expiration of the original term of the lease. New provisions are adopted for a newly defined term. A lease extension addendum can be used to make minor changes to the conditions of an original lease such as the length of the new term, a change in rent, and/or other modifications. Unlike a lease renewal, a lease extension continues the original lease without interruption.

By definition, a lease renewal is a new lease agreement. The parties to the lease renew their landlord-tenant relationship after the original lease has expired. A lease renewal can limit agreements that benefit the landlord or the tenant, whereas they will typically continue during an extension of the term. Additionally, if the original lease has been reassigned, a lease renewal could limit any remaining liability of the original tenant to the landlord. Under a lease renewal, there is a legal instant in time between the expiration of the original lease term and the commencement of the renewal term.

There are many different reasons for using a lease extension addendum instead of a lease renewal. The most common situations are provided below:

A tenant that has adhered to all of the original terms of the lease and a landlord that wishes to retain them, would use the same lease with an extension. This will bypass additional administrative work for writing a new lease and any fees associated with it by either party.
A tenant needs additional time to find a new property or complete their move and does not require a full year or specific-term lease but several weeks or months. An extension to the lease, instead of a new lease, would make more sense in this situation. Shorter-term lease extensions are commonly month-to-month extensions with a higher rent amount as opposed to a one-year extension.

Whether to renew or extend a lease agreement should be considered carefully—taking into consideration the potential benefits and drawbacks of each. Regardless of how to continue a lease is labeled, clear and explicit language reflecting your intentions may help avoid some of the unintended consequences of drafting either document.

Consequences of not using a lease extension addendum. Without a lease extension, if a tenant remains in tenancy after the original lease concludes, the tenant becomes a holdover tenant and the lease converts into a month-to-month tenancy. Landlords are prohibited from renegotiating the cost of rent under month-to-month agreements while tenants are prohibited from renegotiating certain repairs or property related provisions.

What to Include in a Lease Extension Addendum

A lease extension addendum should include the following:

  • Name of the tenant
  • Name of the landlord
  • Property address
  • Date of the addendum
  • The effective date of the lease extension
  • The end date of the lease extension
  • Disclosure of consequences for breaking the lease extension
  • Rent amount during the lease extension
  • Additional deposit (if applicable) for the lease extension
  • Property care during the lease extension period
  • Date and signature of the tenant
  • Date and signature of the landlord

How to Extend a Lease

If you are looking to extend your lease you will want to follow these steps:

  1. Review your original lease. Locate your original lease agreement to determine its end-date. Additionally, note any changes to the original lease provisions that you would like to make if extended. The most common change to a lease extension is the rent. Depending on the current economic conditions in the area, either party may ask for it to be lowered or increased.
  2. Discuss your intentions. Contact the tenant to find out if they intend on extending the lease. And, if they were to extend the tenancy, would it be under the current terms or new terms.
  3. Send the lease extension addendum. Typically, the landlord will mail or deliver the addendum to the tenant(s). This addendum will be attached to the original lease agreement recording any changes that have been made to it. The remaining portion of the original lease agreement will remain intact.
  4. Sign the Addendum. If the landlord and tenant agree to the terms of the extension, they will both need to sign and date the addendum.