Your tenant loves their home. You value their reliability, and the lease is about to expire. What’s your next move?
A lease extension agreement is your go-to solution for keeping a great tenant and avoiding the cost and hassle of creating a brand-new lease or finding someone new.
Our free lease extension agreement template below can help you quickly and easily renew an existing lease while also updating important terms like rent or deposit amounts.
This guide walks you through key points related to creating extension agreements that are clear, sound, and tailored to your needs.
How to create a lease extension agreement
When drafting this agreement, including the following elements is essential to help avoid misunderstandings:
- Lease duration: Define the new term of the lease. Whether it’s a 6-month extension or another full year, both parties should understand when the new lease period begins and ends.
- Rent adjustments: If the monthly rent amount is changing, you must explicitly state this in the agreement. Regardless of whether you’re increasing the rent, keeping it the same, or even reducing it, we recommend always stating the rental amount prominently.
- Security deposit updates: Depending on local laws, you may need to revisit the security deposit requirements. State whether the existing deposit carries over or if you require adjustments, like additional funds.
- Additional clauses: Use this opportunity to incorporate any new lease clauses. For example, if you want to clarify rules around subletting, maintenance responsibilities, or pets, the lease extension agreement is a convenient way to make these updates.
- Legal considerations: Verify that the extension agreement complies with local landlord-tenant laws, such as providing proper notice periods and ensuring all changes are clearly documented and agreed upon in writing by both parties.
Free lease extension agreement template
Our lease extension agreement template is a ready-to-use document with pre-written clauses covering all the lease extension essentials. It includes sections for updating lease terms, rent adjustments, and other key details.
With this template, you can quickly draft an agreement that protects your interests while maintaining a good relationship with your tenant.
Lease Extension Agreement
This Lease Extension Agreement (the “Agreement”) is made and entered into on [Date] by and between:
Landlord: [Landlord’s Full Name]
Address: [Landlord’s Full Address]
Phone Number: [Landlord’s Phone Number]
Tenant(s): [Tenant’s Full Name(s)]
Address of Leased Property: [Rental Property Address]
The parties hereby agree to extend the original Lease Agreement dated [Original Lease Date] under the following terms and conditions:
- Lease Term
The lease term is extended for an additional [Duration of Extension, e.g., six (6) months] beginning on [New Start Date] and ending on [New End Date]. - Rent
The monthly rent during the extension period shall be $[New Rent Amount], payable in advance on the [Day of the Month, e.g., 1st] of each month to [Landlord’s Method of Payment, e.g., designated bank account]. - Security Deposit
The existing security deposit of $[Amount] will [remain in effect/may be adjusted to $[New Amount]] for the extended lease term. - Terms and Conditions
All other terms, conditions, and provisions of the original Lease Agreement shall remain unchanged and in full force unless specifically modified by this Agreement. - Additional Clauses (if applicable)
[Add new clauses, e.g., updated pet policy, maintenance responsibilities, etc., if necessary.] - Signatures
IN WITNESS WHEREOF, the parties hereto have executed this Lease Extension Agreement as of the date first written above.
Landlord Signature:
Tenant Signature(s):
[Landlord’s Full Name]
[Tenant’s “Full Name]
This document serves as an official extension and modification of the original lease. Both parties are advised to keep a signed copy for their records.
One of the greatest benefits of this template is its flexibility. Every rental situation is unique, so we made it easy for you to customize the template to reflect your specific needs. Remember, consulting with a legal professional is always recommended.
Download your free lease extension agreement template and simplify extending your tenant’s lease. It’s quick, customizable, and designed to save you time.
Step-by-step guide for extending a lease
Before you begin creating a lease extension agreement, it’s important to follow the right steps to make sure the extension meets your goals as a landlord and the needs of your tenant:
- Analyze the current lease: Review the existing lease terms to identify any clauses or details you may need to update for the extension.
- Run rent comparables: Research local rent prices and trends to determine if you should adjust the rental amounts.
- Reach out to your tenant: Contact your tenant early to discuss their intent to stay and address any concerns or requests they may have.
- Discuss and agree on new terms: Negotiate the revised terms, such as the lease duration, rental rate, and updated clauses.
- Verify compliance with local laws: Be sure the agreement adheres to local regulations regarding rent adjustments, notice periods, and other legal requirements.
- Prepare the lease extension document: Draft a clear and comprehensive lease extension agreement that reflects all agreed-upon terms and conditions.
Alternative options
Before deciding to extend your tenant’s lease term, you want to understand the difference between a lease extension and a lease renewal.
A lease extension preserves the original lease terms while adding extra time to the lease period, often through an addendum. A lease renewal is a completely new contract, which may include updated terms and conditions, effectively replacing the existing agreement.
If extending the current lease doesn’t meet your investment goals, there are other options you can consider. Each of these alternatives keeps you firmly in control of your property and allows you to make decisions that benefit your long-term objectives.
Offering a short-term lease
A short-term lease typically lasts between 3–6 months. It can be a great option if you’re uncertain about long-term commitments and allows you to maintain occupancy without locking yourself into an agreement that may not fit your future plans.
Opting for a month-to-month agreement
Switching to a month-to-month rental arrangement offers the most flexibility for both parties. You can adjust the rent more frequently (depending on local regulations) or end the agreement with an appropriate notice.
Choosing not to extend the lease
Sometimes, the best decision is to let the lease expire. That may be the right choice if your tenant has been unreliable, you wish to renovate the property, or you are considering selling to an owner-occupant.
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Stessa does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, or accounting advisors.
