How can you structure a lease with an option to renew?

Para renovar siempre será necesario acordar el aumento y los plazos correspondientes para retractarse del contrato. Un 10% de aumento lo considero alto, ya que el IPC normal anual no alcanzaría esas cifras.

In regards to an option to extend being included in the lease agreement. A tenant representative must include that option in their letter of intent when initially negotiating to lease a space.

If a renewal option in a lease is based on the rental and escalation being agreed upon between the landlord and tenant, then such option will be unenforceable if the landlord and the tenant cannot agree on the rental and escalation (agreements to agree are unenforceable in South Africa). Unless there is a third party determination provision added.

Siempre es bueno contar con opciones de renovación, acordando los plazos y aumentos anuales. Cuando eso sucede para la empresa es posible proyectarse a lo largo de los a?os. Dando seguridad tanto al arrendatario como al arrendador, ya que ambos pueden proyectar sus gastos e ingresos a futuro.

Write in the terms in the original lease, either in the lease itself, could be limiting, or better yet, include a rider to the lease with terms. Personally I like to leave the renewal option to the landlord, to make sure that first term of the lease there are no issues with tenant and payments. This way when it's time to renew, terms have already been discussed to avoid further back and forth. A landlord could of course renegotiate, but typically if conditions worsen to avoid vacancy. Escalation of 3-5% year over year.

An example I have seen is where a renewal is granted for a similar lease period, with such renewal at the Landlord's discretion. An example "On the written request of the Tenant made at least One (1) year before the expiration of the Term and if there shall not at the time of such request be any existing breach or non-observance of any of the covenants on the part of the Tenant, the Landlord may in its sole and unfettered discretion grant to the Tenant a Lease of the Premises for a further term of Ten (10) years from the expiration of the Term on such terms and covenants as shall be mutually agreed upon between the parties at that time"

Cada vez que hemos firmado un contrato de arriendo, los primeros seis meses determinan como serán las siguientes clausulas de renovación. Indicando que si en los primeros meses el arrendatario cumple cada parte del contrato, obtendrá beneficios adicionales o la renovación indefinida del contrato.

efectivamente, la opcion de renovación es una tranquilidad para ambas partes, siempre y cuando en el proceso de arriendo, el arrendador cumpla los plazos establecidos, siendo puntual en los pagos y cuidando el inmueble.

No veo desventajas en las opciones de renovación, antes de firmar el contrato, se pueden establecer plazos razonables para terminar el contrato en caso de imprevistos.

If the lease contains a valid option to renew, then it might happen that the tenant exercises such renewal but the landlord doesn't want the tenant (i.e. due to the tenant paying rental late, etc.). So to avoid this, one can add a provision that the renewal is subject to the lease only being renewable if the tenant has complied with all its obligation in terms of the lease during the term of the lease.

Structuring a lease for an industrial property in South Africa that includes a renewal option in addition to the "usual" elements surrounding parties, details about the property, period of the lease, rent, etc. Other factors to consider include exit plans, force majeure, security deposits for lease renewals, and property use, if altered throughout the duration of the lease. When it comes time to renew, back and forth disputes can be avoided by crafting the agreement so that all parties agree on the conditions up front.