A lease extension addendum is a contract that further extends the current lease and its terms. The addendum will identify a new date for lease termination that both the tenant and landlord must be in agreement over, prior to signing the extension. During a lease extension period it is common for the current lease amount to differ and increase, especially if the extension is not for a long period. The new amount will be stated as part of the addendum. The lease extension addendum is added to the current lease and would also be enforceable by law.
What to Include
The Lease Extension Addendum should include the following:
- Name and information of tenant
- Name and information of landlord or rental company
- Property Address
- Date of the addendum
- Effective date of lease extension date
- End date of lease extension
- Disclosure of repercussions for breaking lease extension
- Rent amount during lease extension
- Additional deposit during lease extension
- Property care during lease extension period
- Date and signature of tenant
- Date and signature of landlord
Why Use a Lease Extension Addendum vs a New Lease?
A Lease Extension Addendum can be used over a new lease when the terms and conditions are not going to vary in significantly. Creating a new lease will require redrafting of a full document, potentially obtaining a realtor or lawyer to review the lease and require additional fees due. By using a lease extension, it ensures the process remains simple for both the landlord and the tenant and retains all previous terms and conditions that were part of the original lease. Of note, small changes can be included in a lease extension, although this is uncommon. The addendum will be considered valid once all parties sign the document.
Reasons for a Lease Extension Addendum
There are varying reasons for using an addendum over a new lease and the two most common situations are shown below:
- Current tenants have abided by all current terms of the lease and the landlord wishes to retain them, therefore using the same lease and only creating an extension of it. This avoids additional administrative work for a new lease and fees associated with it that could be due to the landlord and the tenant.
- The tenant needs additional time to find a new place or complete a move and therefore does not require a full year but merely several weeks or months; month to month extensions are common in this situation. This causes the need for an extension over a new lease in its entirety. With a smaller extension it is very common for landlords to endorse a much higher rent payment as opposed to a one-year extension. This is due to the fact that the property will eventually go on the market once again in a short period of time.