My 5 Year Commercial Lease Agreement That I Signed in 2019 Says I Can Renew My Lease For $9/Sq. Ft. in 2024. Can My Landlord Change This Number When It's Time To Renew?
I have an option to renew my Lease Agreeement in 2024 for an additional 5 years for $9/Sq. Ft which is below market value. This is a bit more than I what I've been paying for the last 3 years ($8.80). Can my Landlord Change this number when it comes time to renew? I signed the contract in 2019 when rental rates for my area were much lower. I'm afraid he's going to realize the number he put in the contract in 2019 is now too low, and he's going to try to increase it. Is he allowed to do this?
[{"id": "i0i1kk6", "text": "As long as you are not in default and there isn\u2019t some other language in the contract you\u2019re not telling us about, then no, he\u2019s not allowed to change it because he regrets a fully executed contract.\n\nMake damn sure you notify the landlord that you want to renew prior to the deadline in the contract, because failure to to do that would absolutely allow renegotiation.", "replies": [{"id": "i0i6fbm", "text": "In addition to this, there are generally a few ways for you the tenant to lose this right, so read through your entire lease. It may even be worth getting a lawyer to review with you if you know that you will exercise this option. Even sending to the wrong notice address required in the lease can at minimum give landlord an opening to try and fight you in it. If it\u2019s that under market, it\u2019s probably worth a few legal dollars on his end to do so.", "replies": [], "depth": 2}], "depth": 1}, {"id": "i0i6um6", "text": "No, terms of a lease cannot be amended without consent from both Landlord/Tenant.  As long as you are not in default of your lease (at any time, depending on wording) you can execute your option.  Be aware most leases require you to notify the Landlord 9-16 months **before** the lease expires.  There is a small window to give notice (and give by way of email and certified mail w/o signature).", "replies": [], "depth": 1}, {"id": "i0j85o1", "text": "If you have a contract with his signature on it, he is bound by the contract. No takebacks.\n\nYou need to make sure you notify him in time to extend your lease. There will be a notification window you cannot miss the window. You will also need to read the \"Notice\" section of your contract and see exactly how notice needs to be delivered. Do not eff this up. Do exactly what it says, how it says, inside the time it says. And you'll have a great rent for another 5 years.", "replies": [], "depth": 1}, {"id": "i0k4is4", "text": "Everyone here is legally correct, but let\u2019s be honest and say that law often doesn\u2019t dictate behaviors and outcomes. Any other wording in the contract aside, he can\u2019t LEGALLY make you pay more but let\u2019s say if the market rate in 2024 is 20 and he feels he\u2019s getting hosed this may lead to a fairly acrimonious relationship. He may become difficult and feel you\u2019ve taking advantage of him. (You haven\u2019t, but alas\u2026emotions) depending on his character he may be a bit dirty. He\u2019s also going to have 3 lawyers read that lease and look for a way out. If you mess up anything he\u2019s going to leverage it against you. \n\nTake it, but tread carefully and be as civil and understanding as possible. Let him know that this figure was a key element of your decision making in signing the lease.\n\nOr he\u2019s cool and it\u2019s whatever.", "replies": [], "depth": 1}, {"id": "i0lcjmi", "text": "Nope, but, lawyers.\n\nIt would be too expensive to fight it (on his behalf).  Play it out.", "replies": [], "depth": 1}, {"id": "i0m2k25", "text": "It's smart to consider this and it's possible that the lease contains some adjustment for CPI of base rent or expenses. I'd re-read the lease carefully and then get the opinion of a commercial real estate attorney. Ideally it's who reviewed the original lease in '19, if not get some referrals for someone who's entire practice is CRE. A generalist or someone who closes residential deals may not have the experience that you are looking for. \n\nI'd take the time to review recoveries/expenses (if any) that the landlord is or could be charging. It sounds like you expect there could be pushback on the renewal option on the terms as you understand them, this would be another area that they could get aggressive with. Pay special attention to the base amounts, stops (caps), allowable management fee calc, and CPI index used.", "replies": [], "depth": 1}]