Lease Extension


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.

  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. Leveraged Lease

    A lease agreement that is partially financed by the lessor through ...
  5. Lease

    A legal document outlining the terms under which one party agrees ...
  6. Closed-End Lease

    A rental agreement that puts no obligation on the lessee (the ...
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