An option is a valuable asset. It allows you to renew the lease on the same terms as the original lease.
If you are a tenant and wish to remain in the premises, pay particular attention to the time period within which you must give notice to the landlord of your intention to exercise the option, the type of notice you must give and how to give notice under the lease. If an option to renew is not exercised properly, the landlord may be entitled to reject the notice and your lease may come to an end when the then current term expires.
It is critical to make a note and diarise the date when you need to exercise your option in a diary. If you exercise the option late or in the incorrect format then it is likely to be lost. The date to exercise an option is contained in the Lease, however, most commercial leases require the option to be exercised between three (3) to six (6) months before the end of the lease.
The Landlord does not have to remind you or send you a notice about the option.
Options are usually required to be “exercised” by writing to the Landlord or the Managing Agent and specifically saying that you are exercising the option.
You should always refer to the option clause of your Lease to ensure that you are following the correct procedure and format.
If you require assistance or advice with the exercise of an option or your commercial lease generally, please contact us.