Lease Expiring - Landlord/Tenants Rights - Clarification Needed

[Sean Peters]

Hi All,

I am trying to brush up on my leasing agreements and I think I have researched so much that I have overdone it to the point that I am getting even the basic ideas wrong.

The following is pertaining to a COMMERCIAL/RETAIL lease:

-When there is an Option to Renew Clause in a lease, what additional rights does it give a tenant other than the ability to have first right of refusal when the lease expires?

For example lets say there is a 2 year lease with an option to renew for an additional 2 and the lease states that the agreement will remain the same other than the dollar amount which can be raised.

1)If I agree to the increased rent, does that mean that everything is honky-dory and I am set for another 2 years under the same terms?

2) Is there a state maximum of the amount a commercial lease can increase (I am in CA)?

3) If the rent is increased to an amount beyond what the current tenant is willing to pay, and the tenant moves out, is there any law that prohibits the landlord to rent it out for a lower rate to someone else?

4) Can a landlord, upon expiration of a lease merely state that they no longer want to rent it to the tenant for any explanation given? Does this apply to a tenant who has an option to renew clause?

-Some family friends that are landlords have given me mixed answers about the previous 2 questions. Some say that since it is a landlord’s private property, they can say they do not want to renew a lease even with a renewal clause, without any explanation given. Others say that since there is a lease in place with a renewal clause, no matter what the tenant has the right to resign if the increase is agreed to.

5) Can the landlord decide to use the property for their own business and is this a valid/legal reason to not release the space to the current tenant, again with a renewal clause in place?

6) If a current tenant lease expires within 30 days, how many days in advance (if any) must the tenant notify the landlord that they wish to exercise their right to renew?

7) If the tenant notifies the landlord 2-3 days prior to the lease expiring and the lease automatically reverts to a month-to-month after expiration, does the tenant have any legal rights or have they forfeited them due to improper amount of time given to notify the landlord?

I have spent some long nights on BP and have seen some incredible advice given by users, which I hope can also enlighten me.

Thank you in advance to all who provide input and hopefully all input will be helpful to other users as well.