Lease Extension

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DEFINITION of 'Lease Extension'

A legal agreement that extends the term of a rental agreement. The lease extension document should name the parties to the agreement, provide the dates on which the extension begins and ends, and reference the earlier agreement that is being extended. Lease payments do not have to remain the same under a lease extension.

BREAKING DOWN 'Lease Extension'

A lease extension could be executed between a landlord and a tenant, when the tenant's lease is about to expire and he or she wants to continue renting the property. Another situation where a lease extension might be desirable is if a consumer is leasing a vehicle from an auto dealership and opts to lease or purchase a different vehicle at the end of the lease term, but wants to temporarily continue using the original leased vehicle because the replacement vehicle is not yet available.

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RELATED FAQS
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    As long as the building owner is the person or entity that provides leasehold improvements, then the owner can depreciate ... Read Full Answer >>
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    A net-net-net lease, also known as a triple net or NNN lease, is a type of real estate lease that requires the tenant to ... Read Full Answer >>
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    Leasehold improvements have different depreciation rules depending on whether you are working with U.S. tax basis financial ... Read Full Answer >>
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