Lease Extension

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Gap Amount

    Insurance will only cover a certain amount of coverage if leased ...
  2. Fixed Price Purchase Option

    The right, but not the obligation, to buy a leased item at a ...
  3. Open-End Lease

    A rental agreement that obliges the lessee (the person making ...
  4. Lease

    A legal document outlining the terms under which one party agrees ...
  5. Leveraged Lease

    A lease agreement that is partially financed by the lessor through ...
  6. Closed-End Lease

    A rental agreement that puts no obligation on the lessee (the ...
RELATED FAQS
  1. For what sorts of purposes can the funds in a share premium account be disbursed?

    Deadweight loss is the cost of market inefficiencies due to government regulations that prohibit natural market equilibrium. ... Read Full Answer >>
  2. Can unearned rent be considered deferred revenue?

    Unearned rent can be considered deferred revenue from the perspective of a landlord or rental company, if that landlord or ... Read Full Answer >>
  3. What are the three "nets" of an NNN lease?

    A triple net (NNN) lease is a type of real estate lease in which the tenant is responsible for paying the building's property ... Read Full Answer >>
  4. What are the differences between single, double and triple-net leases?

    A net lease is a real estate lease in which the tenant pays, on top of his rent, one or more of the following expenses: property ... Read Full Answer >>
  5. Can you ask your landlord to remove a waiver of subrogation clause from your lease?

    You can ask your landlord to remove a waiver of subrogation clause, but you will both need to agree to its removal or the ... Read Full Answer >>
  6. Do landlords set up escrow accounts for their tenants' security deposits?

    Landlords must set up escrow accounts to hold tenants' security deposits if the accounts are required by the laws of the ... Read Full Answer >>
Related Articles
  1. Retirement

    Should You Buy Property On Leased Land?

    Find out what to consider before investing in a leased-land property.
  2. Home & Auto

    New Wheels: Lease Or Buy?

    These two major ways to obtain a car have very different advantages and drawbacks. Find out which is best for you.
  3. Home & Auto

    Rent-To-Own Real Estate Full Of Pitfalls

    Before you consider this type of arrangement, you should be aware of how it works, who benefits and the many things that can go wrong.
  4. Retirement

    Are You Ready to Rent?

    If you think it's time to test your wings and leave your parents' nest, read on.
  5. Options & Futures

    Rent To Own; Own To Rent

    This method can help first-time buyers afford a home using a rent-to-own strategy, and it can also be good for investors.
  6. Insurance

    How to Use a Waiver of Subrogation

    A waiver of subrogation means that a party to a contract waives the right to allow someone (usually an insurance company) to sue the other party to the contract in case of a loss.
  7. Home & Auto

    The Income Property: Your Late-In-Life Retirement Plan

    You're nearing retirement age and you don't have the nest egg you need. Here's how an income property can help you make up the shortfall.
  8. Home & Auto

    5 Rental Red Flags

    Know what to look for before entering into a rental agreement.
  9. Home & Auto

    Tips For The Prospective Landlord

    Investing in rental property can generate serious income, but there's more to it than collecting rent.
  10. Home & Auto

    Top Tips For Successfully Renting Out Your Home

    Renting out your home can be a great way to ride out a real estate slump - if you do it right.

You May Also Like

Hot Definitions
  1. Fracking

    A slang term for hydraulic fracturing. Fracking refers to the procedure of creating fractures in rocks and rock formations ...
  2. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  3. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  4. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  5. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  6. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
Trading Center