ABA Family Legal Guide

Forming and Operating a Small Business

Starting a Business

Commercial Leases

What is an option to renew?

An option to renew is a clause in the lease, which you bargain for, that enables you to renew the lease at the end of the lease term for an additional term. Without an option to renew, you may be forced to move or to pay an extraordinarily high rent to remain where you are just at the time the business is becoming very profitable. To provide maximum protection, the rent, or at least a formula for determining the rent during the renewed period, should be specified.